Informing employees in the event of the transfer of their company

Law n°2014-856 of July 31, 2014 relating to the social and solidarity economy (“ESS” law) creates for the benefit of employees a right to information prior to any transfer of business, shares, shares or securities securities giving access to the majority of the capital.


This system aims to allow employees to submit a takeover offer. Decree No. 2014-1254 issued on October 28, 2014 specifies the scope of this obligation, the concept of transfer, the procedures for informing employees as well as the rights and obligations of employees. This text is applicable to transfers concluded as of November 1, 2014. These provisions are not however applicable to transfers made following exclusive negotiation when the negotiation contract was signed before November 1, 2014 (Art. 2 of decree no. 20141254).

I. Scope (staff and equipment)

In general, the system established by the ESS law is required in commercial companies with fewer than 250 employees. A distinction must be made between companies with less than 50 employees, which are not required to set up a works council (Art. L.141-23 of the Commercial Code) and companies with less than 250 employees, which fall into the category small and medium enterprises. The employees of these companies have the right to information in the event of transmission of:

• goodwill (Art. L.141-23 and L.141-28 of the Commercial Code)
• participation representing more than 50% of the shares of a limited liability company (Art. L.23-10-7 of the Commercial Code)
• transferable securities or shares giving access to the majority of the capital of a joint-stock company (Art. L.23-10-7 of the Commercial Code)

The term transmission refers in particular to sales, giving in payment, donations, transactions, trusts, exchanges or contribution to a company. The text is not applicable in the event of succession, liquidation of the matrimonial property regime, transfer of the fund to a spouse, an ascendant or a descendant and in companies subject to a procedure of conciliation, safeguard, judicial reorganization or liquidation.

II. Information methods

The information is transmitted by any means likely to make its date of receipt certain (Art. L.141-25, L.141-30, L.23-10-3 and L.23-10-9 of the Code of trade).
Decree No. 2014-1254 specifies that this information may in particular be transmitted by e-mail or extrajudicial act. A. The content of the information
The information relates to two elements, namely the intention to sell and the fact that the employees can present a purchase offer.
B. Recipients of the information
In companies with less than fifty employees, the owner of the goodwill or shares or shares informs the operator of the fund or the legal representative of the company, who informs the employees without delay.
When the owner is himself an operator, he directly informs the employees (Art. L.14123 and L.23-10-1 of the Commercial Code). This information must be sent no later than two months before the sale. In companies with more than fifty employees, the owner must transmit the information at the latest when the works council is informed and consulted on the transfer project (Art. L.141-28 and L.23- 10-7 of the Commercial Code). When the works council has not been set up, the procedure is identical to that for companies with less than 50 employees.

III. The rights and obligations of employees

Employees are bound by an obligation of discretion under the same conditions as members of the works council.
Employees may, however, be assisted by representatives of the regional chamber of commerce and industry or the territorially competent chamber of trades and crafts. The Commercial Code also provides that employees may also be assisted by any person designated by the employees under conditions defined by decree. According to the practical guide of the Ministry of the Economy, employees can in particular be assisted by a professional adviser. The device is only intended to allow employees to submit a buyout offer. Consequently, when they actually make an offer, the transferor is free to enter into negotiations with these employees or not.

IV. Cession

A. Minimum
period In companies with less than 50 employees, the transfer, in other words, the transfer of ownership cannot take place before the expiry of a period of two months from:

• the notification of information to employees when the transferor is the operator of the fund or legal representative
• the notification of the information to the operator or the legal representative, when the transferor is not an operator

The assignment may take place before the expiry of this period if the employees inform the assignor of their intention not to submit an offer.
In companies with more than 50 employees, no minimum period has been set.
B. Maximum
period In companies with less than 50 employees, the transfer must take place within a maximum period of two years from the date on which the transfer is authorised. In other companies, when the works council is seized, this two-year period is suspended between the date of referral to the committee and the date on which it issues its opinion and, failing that, the date of expiry of the period for rendering the 'notice. Failing this, the transferor is required to inform the employees again.

V. The employee's remedies

In the absence of information, in the event of late information or when the information is incomplete, any employee may request the cancellation of the assignment. Employees have a period of two months from the publication of the notice of transfer of the fund to act.