Reorganising a group, absorbing a subsidiary, isolating a risky business line, preparing a transmission or bringing in an investor: restructuring operations serve precise strategic objectives. Poorly conducted, they expose you to tax reassessments, creditor challenges or the operation being called into question.
Maître Léa Scemama advises on and implements corporate restructuring operations in Paris and across France, constantly connecting the legal, tax and governance issues. See all our services in corporate law.
How we work
| When we act | What we do | What you receive |
|---|---|---|
| Scoping | Choosing the right tool for the objective: merger, universal transfer of assets, partial asset contribution, demerger, conversion | An options note comparing the available routes, with their timescales |
| Preparation | Merger agreement or plan, valuations, reports where required, timetable | An enforceable file and a realistic reverse timetable |
| Protection of third parties | Publication, monitoring of the creditors' right to object | Deadlines cleared, the transaction secured |
| Resolutions | Shareholder meetings, formalities, filings and publications | The transaction completed |
| Tax | Securing the favourable regime where the conditions are met | The undertakings written into the deeds |
Our billing arrangements are set out on our fees page.
Which tool for which objective
The question is almost never “should we merge?” but “what is the objective?”. The choice of tool determines the timetable, the cost and the tax regime.
| Your objective | The tool | What it involves |
|---|---|---|
| Absorbing a wholly owned subsidiary, simply | Universal transfer of assets and liabilities | Decision of the sole shareholder, thirty-day creditor opposition period, no merger agreement, no report, no exchange of shares |
| Absorbing a wholly owned subsidiary while controlling the effective date | Simplified merger | Merger agreement, lighter formalities, no exchange ratio report |
| Combining two companies with no shareholding link | Standard merger | Merger agreement, valuations, reports, meetings of both companies |
| Isolating, hiving down or preparing the sale of a business line | Partial asset contribution | Can be placed under the demerger regime, tax neutrality subject to conditions |
| Splitting activities between partners who are parting ways | Demerger | Rigorous allocation of assets and liabilities, creditor protection |
| Changing legal form | Conversion | No new legal entity, conversion auditor in certain cases |
The merger
A merger combines two companies into one. The absorbed company transfers its entire estate to the absorbing company and disappears, its partners receiving shares in the beneficiary company. The operation requires draft merger terms, a valuation of contributions, respect for the creditors right of opposition and approval by the meetings. The firm manages the whole process and secures the favourable tax regime where the conditions are met.
The partial asset contribution
A partial asset contribution allows the transfer of an autonomous business line to another company in exchange for shares. It is a preferred tool to isolate an activity, prepare its sale, hive down a division or ring-fence a risk. Placed under the demerger regime, it can benefit from tax neutrality subject to conditions.
The demerger
A demerger consists of splitting a company's estate between several beneficiary companies. It is often used to separate activities that have become incompatible, organise the exit of partners or prepare a family transmission. Its implementation requires great rigour in allocating assets and liabilities and in protecting creditors.
Where a demerger is used to separate shareholders in dispute, it is prepared alongside the litigation strategy: see our page on shareholder disputes.
Company conversion
Changing corporate form, from an SARL to an SAS, from a civil company to a commercial company, often reflects a change of scale: opening the capital, evolving governance, modifying the manager social regime. Conversion does not create a new legal entity but follows a precise procedure, sometimes requiring a conversion auditor.
The choice of the resulting legal form follows the same criteria as the initial choice, set out on our page on company formation.
Capital operations
Capital increase, reduction, accordion operation, redemption: capital operations support growth, financial recovery or the entry of new partners. The firm ensures their legal regularity and consistency with the shareholders agreement and the financing strategy.
Why a lawyer for your restructuring?
These operations combine company law, taxation and sometimes employment law. An error of sequence or classification can cost the benefit of the favourable regime. The firm coordinates the operation with your advisers and connects it with your transfer or fundraising projects.
Frequently asked questions
What is a merger by absorption?
It is the operation by which one company (the absorbing company) receives the entire estate of another (the absorbed company), which disappears. The partners of the absorbed company receive shares in the absorbing company in exchange. It is a universal transfer of assets, tightly regulated.
Why convert an SARL into an SAS?
Conversion into an SAS offers greater statutory freedom, facilitates the entry of investors and changes the manager social regime. It requires, however, a precise procedure, sometimes a conversion auditor, and a prior analysis of the tax and social consequences.
Does a restructuring trigger immediate taxation?
Not necessarily. Many operations (mergers, partial asset contributions under the favourable regime) may benefit from deferral or tax neutrality, subject to conditions. Rigorous structuring is essential to benefit from it.
How long does a merger take?
A standard merger generally requires several months, due to the draft terms, any reports, the creditors opposition period (30 days) and the meetings to be held. The timetable must be planned precisely.
Related topics
- Sale of a business: selling the business rather than the company.
- Shareholders agreement: rewriting governance after the transaction.
- Business insolvency: restructuring carried out under cash pressure.
Written by Maître Léa Scemama, admitted to the Paris Bar, Miraï Avocats. This page states the law applicable at its update date. It is general in nature and does not constitute advice tailored to a particular situation.