During his lifetime, the head of company can convey his company in several ways:

• Simple donation : in the presence of a single child, this act allows the transfer of ownership of the professional assets to an heir without financial consideration.

• Donation-sharing : this consists of the head of company distributing his property among the members of the family (spouse, ascendant, descendant).
  One receives property from the company and the others receive gifts of property and money. If the goodwill constitutes the majority of the assets, it is up to the recipient of the gift to compensate the other heirs by paying a sum of money, called payoff.

Furthermore, the Head of company may decide to give only the bare-ownership of its company and to preserve itsusufruct. Upon the death of the donor, the usufruct ceases and the donee becomes a full owner without having any additional right to pay.

The full donation of the company implies a Universal Transmission of Professional Heritage (UPOH), i.e. transmission of all the goods, rights, obligations and securities necessary for the business.

In other words, the Head of company (the transferor) cedes theactive of the company (in particular, components of the goodwill) and its indebted (debts, collateral).

Specifically, the donor transmits the goodwill, which includes the following:

• Clientele
• Sign and trade name
• Right to lease : right to take over from the holder of a commercial lease, occupy the premises and enjoy a right to renewal of the lease
• Furniture, material and tooling : vehicles, machinery, computers, offices
• Inventory and goods
• Intellectual property rights : patents, software, trademarks, domain name
• Money : cash fund means any cash held at the place of pursuit of the professional activity and the sums entered in the bank accounts dedicated to that activity
• Employment and insurance contracts

In addition, a universal transfer of professional assets implies the transfer of these other elements:

• Immovable property used for the activity (if owned): including that part of the principal residence used for business purposes
• Receivables : amounts owed by customers but not yet paid
• Collateral : pledge of the goodwill, for example, a pledge on inventory.
• Debts : repayment of bank loans and operating debts (e.g. to a supplier). The assignment of a debt requires the written agreement of the creditor. However, contributions and social contributions debts are not included in the transfer.

The drawing up of an act of assignment shall be obligatory. It shall include the following:

• Divested intangible and tangible assets : customer, brand, trade name, right to lease, patent, equipment, tools, stock, etc.
• Identity of the parties : full name, date and place of birth, address of domicile
• Date and nature of the act : authentic instrument or private act
• Origin of the transferred goodwill : identity of the predecessor, date on which the transferor acquired the company himself and at what price to establish any capital gain
• Turnover and operating income : over the last 3 financial years prior to the transfer
• Statement of pledges encumbered on the fund : these are pledges which have been granted to creditors of the company in the 10 years preceding the date of the sale. If the company is not pledged, the instrument must also state that fact.
• Commercial lease terms : date and duration of the lease, amount of rent, conditions for renewal, identity and address of the lessor
• Agreement of the spouse : if the transferor is married under the community system

Since 21 July 2019, the disclosure of information on the origin of the company, the statement of collateral and the results of the last 3 financial years no longer required. Nevertheless, the disclosure of all this information allows the assignment to be concluded in full transparency between the parties.

The deed of assignment must be filed with the tax office of the registration without waiting if it is a privately signed document or, in a 1-month period after the sale is signed, if the authentic instrument.

The transferor must file with the registration department, on site or by mail, the following:

• Assignment of company in 2 copies
• Trade Transfer Declaration Form in 3 copies
• Form for declaring the condition of equipment and goods transferred in 3 copies
• Payment of the registration fee (in cash up to €300, by check or by transfer)

Declaration of transfer of goodwill or goodwill

Declaration of transfer of goodwill or goodwill: condition of equipment and new goods transferred

When a donation is made, the tax administration collects a called tax gift right.

This right of donation is in principle at the expense of the beneficiary of the donation. However, the deed of assignment may provide that payment of the fee shall be borne by the donor. In this case, the amount of the duty shall not be considered as a donation supplement.

To calculate this tax, the registration department proceeds as follows:

1. It takes into account the value of the gift.
2. He then deducts from this first value the amount of any deductions.
3. Finally, it applies a tax scale (a percentage) to the value found.

The amount of the rebate and the tax rate vary based on kinship between the donor and the recipient of the donation (the donee).

In addition, 2 specific reductions may also be applicable in the case of a transmission of company.

When transmitting his company, the head of company must comply with advertising formalities obligatory. These make it possible to return the assignment enforceable against third parties.

Individual business The transfer of the cessation of activity. This shall be declared on the website of the company formalities office, within 45 days from the publication of the assignment in the legal advertisement medium.

From a fiscal point of view, this cessation carries the costimmediate taxation of profits carried out since the end of the last financial year for which payment of VAT.