Company transmission: running a diagnosis
Verified 14 November 2023 - Legal and Administrative Information Directorate (Prime Minister)
Diagnose company is to conduct an in-depth inventory of the company (activity, assets, customers, strategy). Identifying the strengths and weaknesses of the company will facilitate the conditions of its transmission. A clear and detailed knowledge of the company is necessary to demonstrate to the buyer that he can establish a realistic, viable business plan that can be presented to a financial organization.
What applies to you ?
A full diagnosis of the company requires collecting as much information as possible. This diagnosis should be based, at the very least, on the following documents.
Business
Legal documents
- Kbis Extract or proof of registration with the NNE : it is easily accessible in company Directory
- Statutes of the business : the articles of association specify the object of the company, the length of the business, the location of the registered office, the allocation of capital, the conditions for the authorization of a new shareholder, etc.
- Minutes of the last general meeting
- Commercial lease : The lease indicates the activities permitted by the commercial lease and its expiry
- Miscellaneous Contracts : general conditions of sale, employment contracts, commercial contracts, operating licenses, etc.
Accounting and financial documents
- Balance Sheets last 3 fiscal years
- Profit and loss accounts last 3 fiscal years
- Accounting Annexes last 3 fiscal years
- Detailed turnover analysis
- Bank Account Statements company
- Timelines : payment of suppliers and social security contributions
- Hardware Status : acquisition dates, depreciation schedule
Individual business
Legal documents
- Extract K, proof of registration with the NNE : it is easily accessible in company Directory
- Commercial lease : The lease indicates the activities permitted by the commercial lease and its expiry
- Miscellaneous Contracts : general conditions of sale, employment contracts, commercial contracts, operating licenses, etc.
Accounting and financial documents
- Balance Sheets last 3 fiscal years
- Profit and loss accounts last 3 fiscal years
- Accounting Annexes last 3 fiscal years
- Detailed turnover analysis
- Bank Account Statements company
- Timelines : payment of suppliers and social security contributions
- Hardware Status : acquisition dates, depreciation schedule
On the basis of the documents gathered, the overall diagnosis of the company consists in carrying out several diagnoses covering the entire business:
- Diagnosis of its activity : This involves assessing the opportunities and risks associated with the company's market, identifying competitors and assessing its competitiveness. In practice, this diagnosis alone may prove decisive in the choice of the purchaser of the company.
- Diagnosis of means : this involves analyzing the real estate, material, facilities, equipment, patents and stocks available to the company to carry out its business. We must also look at the organization of the company: who is responsible for management, production and sales?
- Human diagnosis : This involves identifying the role and functions of employees within the company and assessing the risks associated with the departure of the manager. Improvement strategies can be proposed to correct any imbalances in company management. Unemployed companies are not affected by this diagnosis.
- Financial diagnosis : the financial health and profitability of the company must be assessed. This diagnosis enables the purchaser to encrypt the realistic or unrealistic aspect of the operation.
- Legal diagnosis : it is necessary to recall the regulations governing the activity in force (operating conditions, standards, labels). It is also necessary to list the contractual obligations of the company (rental, insurance, outstanding credit, etc.). These items will be transferred automatically upon recovery.
- Quality, safety, environment diagnostics : This is to ensure that the company complies with environmental (use of chemicals, waste management) and personnel safety regulations.
Please note
Some of these diagnoses must be done with professionals : accountants to best value all the assets of the company and notaries or lawyers to analyze the legal aspect.
Once the various diagnoses have been carried out, it is necessary to carry out a synthesis of this analysis in order to identify:
- The Forces company and prospects for improving the transmission project
- Weaknesses the company and the corrective measures to be implemented
The analysis of the results will allow you to deliver to the buyer a transparent project information to convince him that buying your company is a good deal.
Who can help me?
Find who can answer your questions in your region
Public support service for SMEs
TPE & SME, you have a project, a difficulty, a question of daily life?
You are called back by THE counselor which can help you within 5 days (average time to care).
Online service