Selling or buying a business (fonds de commerce) means transferring a living activity — goodwill, a location, a sign, know-how — not just walls. The operation follows protective formalism: deed particulars, legal publicity, price blocking, information of creditors and employees. Any poorly handled step can weaken the sale or expose the buyer to the seller’s liabilities.
As a sale-of-business lawyer in Paris, Maître Léa Scemama assists sellers and buyers, from the preliminary audit to drafting the deed and releasing the escrow, so that the transfer is legally sound and financially secure.
What a business (fonds de commerce) covers
A business (fonds de commerce) is a set of elements dedicated to running a commercial activity. It includes intangible elements — goodwill and clientele, the trade name, the sign, the lease rights, licences and authorisations, possibly trademarks or domain names — and tangible elements: equipment, tools and stock.
The clientele is its central element: without its own clientele there is no business. It is also what gives it value, and therefore the main issue in setting the price.
Selling the business or selling the company?
The same operation can often be structured in two ways: the sale of the business (selling the operating assets) or the sale of the shares of the company operating it (selling the whole structure). The two routes do not share the same legal regime, taxation or allocation of risk.
In a sale of the business, prior liabilities in principle remain with the seller, which protects the buyer; in a sale of shares, the buyer takes over the company with its history, hence the importance of a warranty on assets and liabilities. The firm helps you choose the most suitable structure before starting negotiations.
The deed of sale and its particulars
The deed of sale precisely describes the business sold, its price and its allocation between intangibles, equipment and stock. It traditionally contains information decisive for the buyer’s consent: turnover and results of recent financial years, the state of registered privileges and pledges, and the details of the lease. Inaccurate or incomplete information may give the buyer a remedy.
The firm drafts a complete and balanced deed, with the appropriate clauses: conditions precedent (obtaining financing, landlord approval), the seller’s non-compete clause, the treatment of ongoing contracts and the terms of the guarantee.
Price escrow and the creditors’ right of opposition
After signing, the price is not immediately released to the seller: it is held in escrow for several months. This period allows the seller’s creditors’ opposition right to be cleared — they may come forward after the sale is published to assert their claims — and the taxes due on the sale to be settled.
This mechanism protects the buyer, who might otherwise have to pay some of the seller’s debts even after paying the price. The firm arranges the escrow and follows the opposition procedure through to the release of funds.
Commercial lease and employee information
The lease rights are often the most valuable element of the business. The commercial lease is in principle transferred as of right to the buyer (article L145-16 of the Commercial Code), but its clauses — landlord approval, the seller’s joint guarantee, permitted use — must be carefully analysed. The firm draws here on its experience of commercial leases.
Where the company has fewer than 250 employees, they must be informed of the planned sale at least two months in advance, so they may make a buyout offer. This often-overlooked formality is essential to the legal security of the operation.
Formalities, publicity and taxation
Once the deed is signed, several formalities follow within strict deadlines: registration of the deed with the tax authorities, publication of a notice in a legal gazette and then in the BODACC, which starts the creditors’ opposition period. Registration duties, calculated on a progressive scale based on the price, are in principle borne by the buyer.
The firm manages all these formalities and ensures deadlines are met, on which the validity of the sale and the release of the price depend.
Why entrust the sale to a lawyer?
The sale of a business crystallises, in a single deed, issues of commercial law, contract law, leases and taxation. The lawyer secures the negotiation, protects the buyer against hidden liabilities and the seller against any challenge to the sale. The firm also handles neighbouring operations: the formation of the operating company, the commercial contracts taken over and, in case of dispute, commercial litigation.
Frequently asked questions
What is the difference between selling a business and selling shares?
Selling a business (fonds de commerce) means selling the activity itself (goodwill, sign, lease rights, equipment) without transferring the company: prior debts in principle remain with the seller. Selling shares means selling the company, with its assets but also its liabilities. The choice has major legal and tax consequences and should be decided before any negotiation.
Why is the sale price held?
The price is placed in escrow, usually with the drafter of the deed or a notary, for several months. This protects the buyer: it allows the seller’s creditors’ opposition period to run and the taxes on the sale to be paid before the price is released to the seller, so the buyer avoids paying twice.
Is the commercial lease transferred to the buyer?
Yes. Under article L145-16 of the Commercial Code, the commercial lease is in principle transferred as of right to the buyer of the business; clauses prohibiting such transfer are deemed unwritten. The lease terms (landlord approval, joint guarantee of the seller) must nonetheless be checked to secure the operation.
Must employees be informed before a sale?
In companies with fewer than 250 employees, the manager must inform staff of the intention to sell the business at least two months before the sale, so that one or more employees may make a buyout offer. Failure to comply may engage the seller’s liability.