Commercial law and business assets
Lawyer specializing in the sale of a business to secure the sale or purchase
Buying or selling a business hinges on three key points: informing employees, the fate of the lease, and protecting the purchase price. A mistake in any one of these areas can be costly, months after the signing. Our lawyers are involved from the initial letter of intent through to the final payment, representing both the seller and the buyer, and draft a document that clearly allocates the risks.
- Seller or buyer:For both the seller and the buyer
- Five stages: From the letter of intent to the payment of the prize
- Romain Picard, Lead Lawyer, Partner, Paris Bar
What are the steps involved in selling a business?
A sale is not simply a matter of signing a deed. Between the first meeting and the final payment of the price, the transaction goes through five stages, and each has its pitfalls.
- The letter of intent sets out the proposed price, the timeline, and confidentiality. It should not bind the buyer more than they are willing to, nor leave the seller tied down for months.
- The audit verifies the accounts, the lease, the contracts, the employees, the permits, and any ongoing disputes. The seller owes fair information on matters that are crucial to the buyer (Article 1112-1 of the Civil Code).
- The agreement binds the parties under conditions: obtaining financing, agreement of the landlord, absence of pre-emption rights, absence of hidden debts.
- The deed of transfer describes the business, sets the price and allocates the guarantees.
- The formalities follow the signing: publication, registration, period for objection, then payment of the price to the creditors and the seller.
In a business with a lease, employees, and a local clientele, these five stages overlap. A point overlooked in the first stage will be paid for in the last.
Five times, and each has its trap
The situations we deal with
Seller preparing to leave
A business owner who is selling their business to retire or change careers, and wants a secure price, limited guarantees and a solvent buyer.
Purchaser of a business with a lease
A prospective tenant wants to know what the landlord can refuse, what they must pay initially, and what risks they face if the rent is revised.
Funds with employees
Sale which transfers the team: prior information, maintenance of contracts and social debts to be identified before signing.
Price financed by a loan
Acquisition conditional upon bank approval, with escrow of the price and suspensive conditions to be determined.
What changes does the law of May 26, 2026 bring regarding employee information?
Law No. 2026-403 of May 26, 2026, on simplifying economic life, eased the obligation to inform employees before the sale of a business. Three points emerge from the comments published by professionals:
- the deadline is reduced to one month before the sale, instead of two months;
- the civil fine is capped at 0.5% of the sale amount, instead of 2%;
- The works council is informed and consulted in companies with at least 50 employees that have a works council; other companies remain subject to individual employee information.
The deadline
The civil fine
The CSE
The law applies to sales concluded at least two months after its enactment. The binding signature date (promise, agreement, or deed) must be examined before signing the preliminary sales agreement to determine which legal regime applies. Each employee may waive the two-month waiting period in writing.
The risk isn't limited to the fine: a lack of information can lead to disputes regarding the seller's fairness. We prepare the information with the seller and ensure it is traceable.
What happens to the commercial lease upon transfer of ownership?
The right to lease is often one of the most valuable assets of a business, and one of the most vulnerable. Four questions arise right from the letter of intent:
- Funds and lease rights
- Landlord's agreement, or approval
- The seller, jointly and severally liable for rent and charges for three years
- Does the landlord need to give their consent? Many leases contain an approval clause or a clause restricting the assignment of the business. A clause that prohibits any assignment of the lease along with the business is considered null and void, but the formalities stipulated in the lease must still be strictly observed.
- Is the seller still liable? The seller remains jointly and severally liable for the buyer's rent and charges for three years from the date of the sale (Article L. 145-16-2 of the French Commercial Code). The landlord must inform the seller of any non-payment within one month of the payment becoming due.
- What are the arrears? The buyer must request a statement of unpaid rent and charges before signing.
- How long is left? A lease close to renewal or a three-year expiry date changes the value of the business.
For issues specific to premises, see our expertise in real estate law and commercial leases.
How to protect the price: advertising, opposition, and escrow
This is the point where the buyer is most vulnerable. The seller's creditors can object to the price. The deadlines are short and the penalties severe.
- Advertising: the sale is published in a legal notices journal within 15 days of the deed, then in the BODACC (article L. 141-12 of the Commercial Code).
- Objection: The seller's creditors may file an objection within 10 days of the last publication.
- Payment: A buyer who pays the seller before the end of this period is not released from liability to creditors who object. The Court of Cassation reiterated this on March 8, 2023 (Commercial Chamber, No. 21-18.677).
The deadlines are short and the penalty is severe
The usual solution is to hold the purchase price in escrow: part or all of the price is entrusted to a third party, who usually only releases it after the objection period and the period of joint and several tax liability have expired. The seller knows they will be paid, and the buyer knows they will not be paid twice. We draft the escrow clause and monitor its implementation.
How much do the registration fees cost?
The buyer bears the registration fees, calculated in brackets on the price (article 719 of the General Tax Code):
- 0 % on the portion of the price up to €23,000;
- 3 % on the portion between €23,000 and €200,000;
- 5 % on the portion exceeding €200,000.
Example: For a business sold for €300,000, the transfer tax is €5,310 on the portion from €23,000 to €200,000 (€177,000 at 3%), plus €5,000 on the remaining €100,000 (at 5%), totaling €10,310. A notarial deed is registered within one month of its signing. A private agreement must be registered without delay, before the legally required publication (15 days). Late registration incurs penalties.
Business sold for €300,000
What obligations does the buyer have after signing?
- Tax solidarity:Direct taxes payable by the seller, up to the price limit.90 days,30 days if the conditions are met.
- Municipal right of pre-emption.Prior declaration to the town hall.
- Employment contracts:They continue automatically.
- Fiscal solidarity: The buyer may be liable for the seller's direct taxes, up to the purchase price, for 90 days from the date the seller files their tax return (Articles 201 and 1684 of the French General Tax Code). This period is reduced to 30 days if the notice of transfer is sent to the tax authorities within 45 days of publication, if the seller files their tax return within 60 days, and if they are up to date with their tax obligations. The escrow account covers this risk.
- The municipality's right of pre-emption: Within areas designated for the protection of commerce and crafts, the municipality can act in place of the purchaser. A prior declaration to the town hall is then required (article L. 214-1 of the Town Planning Code).
- Employment contracts: they continue with the full purchaser (article L. 1224-1 of the Labour Code).
How our support works
Scope of the operation
We define with you the scope, the schedule and any potential roadblocks, then we draft the letter of intent.
Legal audit of the fund
Leases, contracts, employees, permits, disputes: we identify the risks and translate them into conditions or price adjustments.
Negotiation and drafting
Compromise, deed of assignment, escrow, guarantees, non-compete clause: we defend your position and lock down the clauses.
Formalities and payment of the price
Advertising, registration, monitoring of objections, informing employees and release of the prize in the correct order.
What deadlines and obligations should be considered?
This table summarizes the key calendar points. Each case may have its own specific deadlines, particularly for leases.
| Stage | Deadline | Main person concerned |
|---|---|---|
| Employee information | No later than 1 month before the sale | The seller |
| Publication in a legal notices journal | 15 days from the date of the act | The two parties |
| Creditors' objection | 10 days after the last publication | The buyer, who must keep the price |
| Registration of the act | Authentic deed: within one month of signing. Private deed: without delay, before publication | The buyer, who pays the fees |
| Tax solidarity | 90 days from the filing of the seller's statement of results (30 days if the conditions are met) | The buyer |
What guarantees should be included in the deed?
The act must provide
- The declaration of accounts and contracts
- The guarantee against undeclared charges
- The fate of ongoing disputes
- Framing the seller's competition
The seller
- Capping your guarantees
- limit its duration
Non-compete clause valid if limited
The sale of a business is not a new sale: the buyer takes over an existing business with a history. The agreement must therefore include provisions for the disclosure of accounts and contracts, guarantees against undeclared expenses, and the handling of any pending legal disputes. It must also regulate the seller's competition: a non-compete clause is valid if it is limited in time, geographical scope, and to the specific business being sold.
The seller, for their part, has an interest in capping their guarantees and limiting their duration. This negotiation is one of the most tense in a sale, and it's the one where a lawyer most often changes the outcome. For a transaction that also involves the company's shares, see our page on corporate law and M&A.
Frequently asked questions about the sale of a business
Who pays the registration fees on a transfer of a business?
In principle, it is the buyer who is responsible. The fees are calculated in brackets based on the price: 0% up to €23,000, 3% from €23,000 to €200,000, and 5% above that. A notarial deed must be registered within one month of its signing; a private agreement must be registered immediately, before publication (15 days).
When can the buyer pay the price of the business?
It is best to wait until the end of the objection period, which is 10 days after the final publication, and the end of the joint and several tax liability period (90 days from the date the seller's income tax return is filed). The escrow agent's role is to hold the purchase price during these periods. A buyer who pays too early may have to pay a second time to the seller's creditors who filed objections.
Should employees be informed before selling a business?
Yes, under the conditions set by law. Since the law of May 26, 2026, the information must be provided no later than one month before the sale, instead of two months. In companies with at least 50 employees and a works council (CSE), the council is informed and consulted. In other companies, each employee is informed individually. The civil penalty for non-compliance is capped at 0.5% of the sale price.
Can the landlord oppose the transfer of the lease?
It depends on the lease. A clause prohibiting any assignment of the lease with the business is considered null and void, but the lease may include an approval clause or specific formalities to be observed. The assignor remains jointly and severally liable for rent payments for three years from the date of the assignment.
Are the employees transferred to the acquiring company?
Yes. Employment contracts in effect on the date of the transfer automatically continue with the buyer, under the same conditions. It is therefore important to be aware of any outstanding social security contributions and benefits before signing.
Content prepared by the Corporate Law and M&A Department of Arst Avocats. Lead lawyer: Romain Picard, Partner, Paris Bar. Rules verified using official and professional sources (French Commercial Code, French General Tax Code, Law No. 2026-403 of May 26, 2026). Updated October 2026.