Transfer of company individual business: transfer of the

Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)

You have the option of offering to buy back the entire company to employees. The assignment is subject, after the signature of the deed of sale, to the fulfillment of many formalities. The purpose of these formalities is to ensure the protection of the transferor (you), the transferee (the transferee) and the creditors company.

The assignment of your company involves the Universal Transmission of Professional Heritage (UPOH), i.e. the transfer of all the goods, rights, obligations and securities necessary for your business.

In other words, you're ceding the authorityactive the company (the components of the goodwill) and its indebted (debts, collateral).

Specifically, you are transferring the goodwill, which includes:

  • 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 you own it): including that part of the principal residence used for business purposes
  • Receivables : amounts owed by your customers but not yet paid
  • Collateral : pledge of the goodwill, pledge on the stock, for example.
  • 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.

Please note

the Universal Transfer of Professional Assets (UETP) is the default regime. Instead, you can make a non-integral transfer and give away items in isolation. For example, an assignment of the sole goodwill without the real property and debts of the company.

What information?

In the companies of less than 250 employees, you must inform employees:

  • of your willingness to sell the company
  • and the possibility for employees to to submit an offer to purchase to acquire the company.

FYI  

from 250 employees, no information is required.

How do you disseminate information?

Employees can be informed by any means of such a nature as to make the date of receipt certain:

  • During a information meeting : with signature of a attendance register
  • By display : with signature of a dated register
  • By email : by using a process that can attest to the date of receipt with certainty
  • By Delivery in your own hand : with signature or receipt
  • By act of a commissioner of justice (former bailiff's act) or lawyer, etc.

When should information be disseminated?

This information must be given to employees at the latest 2 months before the date of conclusion of the contract of sale.

Any purchase offer submitted by one or more employees must be communicated to you without delay. However, this offer does not no priority character compared to other offers.

You are completely free to enter into negotiations with the employees or not. Refusal to consider or accept an offer need not be motivated. You have the right not to answer.

When each employee has made known his decision not to present a bid, the sale of the company may take place before the expiration of the 2 months.

What sanctions?

If the company is sold without the employees having been informed, the latter may bring the matter before the judge for compensation for their loss.

In this case, you may be ordered to pay damages rising up to 2% of the amount of the sale.

Furthermore, informed employees are subject to an obligation to discretion. Failure to comply with the obligation of discretion is a fault which justifies a disciplinary sanction up to and including the dismissal of the employee.

If employees don't have the resources to take over your company, they can set up a business called takeover holding. The holding company can take any legal form: SA, SAS, SARL, EURL, etc.

The holding company will be responsible for to take out the loan necessary for the takeover of the goodwill. The maturity of the loan (or financing debt) will be paid through the dividends distributed by the business taken over.

Registration Declaration

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.

You must submit to the registration department, on site or by mail, the following items:

  • 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 registration fees (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

Who shall I contact

Warning  

Universal transfer of professional assets is not valid if you or your buyer have been personal bankruptcy. Such bankruptcy shall entail the prohibition of managing, directing, administering or controlling, directly or indirectly, any company or business.

Payment of registration fees

Registration fees are calculated on the transfer price as follows:

  • 0% up to €23,000
  • 3% between €23,001 to €200,000
  • And 5% beyond €200,000

The minimum registration fee is €25. If the sale transaction includes sales of new goods, they shall be exempt from registration fees.

The cost of registration is at the expense of the purchaserHowever, there is nothing to prevent you from covering some or all of these costs.

Please note

Individual business When the treated as an EURL (option for business tax), its transfer is treated as a transfer of shares. In this case, a rate of 3% is applied to the sale price (or 5% for businesses with a preponderance of real estate).

FYI  

The purchaser shall benefit from abatement of €500,000 on the value of the fund if it undertakes to carry on business and to ensure the effective management of the company for at least five years from the date of take-over.

The publicity formalities are mandatory and allow the transfer to be made enforceable against third parties.

Publication in the Bodacc or in a legal advertising medium

You have the choice between 2 means of publication :

  • Either publication in the Bodac
  • Either publishing legal announcements in a medium
Publication in Bodac

You have a deadline of1 month from the transfer of your company to publish a notice to the Official Bulletin of Civil and Commercial Advertisements (Bodac).

To publish your opinion, please contact (on-site or by mail) at commercial court registry on which the seat of your company depends. He will be responsible for sending the notice directly for publication on the dedicated website bodacc.

Who shall I contact

The notice must include following mentions :

  • Birth name, surname, first names and, where applicable, the business name of the transferor (you) and the transferee (transferee)
  • Professional activity and EPA code
  • Address of the principal establishment or, in the absence of an establishment, the address of the dwelling-place where the transferred company is fixed
  • Siren Number

In addition, the notice must be accompanied by a descriptive statement of your transferred professional assets. It contains the following information:

  • Overall value of the asset
  • List of collateral from which you benefit and the amounts of the claims secured by them
  • Aggregate value of liabilities
  • List of the assets of your professional property subject to a security right and, for each of the assets concerned, the nature of the security right and the amount of the secured claim

The descriptive state shall be established taking into account the last closed accounting year updated on the date of the transfer, or, for individual contractors not subject to accounting obligations, on the date resulting from the agreement of the parties.

Publish Legal Ads in Media

You have a deadline of1 month from the transfer of your company to publish an opinion in a legal listing support.

Once published, a certificate of publication the notice of amendment is issued.

Opposition by creditors

The creditors of the company shall have a1 month as of the advertisement for oppose the transfer professional heritage.

Creditors shall indicate, by registered letter with acknowledgement of receipt or by extrajudicial act transmitted to the purchaser's domicile, the amount and causes of the claim.

The judge shall examine the merits of the application and, where appropriate, order repayment of the debt. In that case, you are committed to all your movable and immovable property present and future (except for your principal residence).

On the other hand, opposition does not prevent the universal transfer of assets which takes place on expiry of the opposition period.

Immediate taxation of profits

The transfer of the company or business shall entail the immediate taxation of profits since the end of the last completed financial year until the date of transmission.

Profits will be taxed on income tax (IR) or business tax (SI), depending on your company's situation.

You must send the tax department (SIE), on site or by mail, a tax return in the 60 days from the publication of the assignment in a legal listing support.

Depending on the company's tax system, you will have to fill out one of the following forms:

  • Business Tax Return
  • Income Tax Return (BIC)
  • Income Tax Return (NTB)

Business Tax Return (SI)

2023 Income Statement 2022 - Industrial and Commercial Profits (BIC)

Non-Commercial Profits (NTB) - Controlled Reporting Regime

Who shall I contact

Value added tax (VAT)

The transfer of the company or goodwill shall entail the payment of VAT perceived.

If you are liable for VAT, you must make a VAT return to the tax office (SIE) within a period of 30 days from the publication of the assignment in a legal advertisement medium.

This period is extended to 60 days if you are placed under Simplified Taxation Regime (SIR).

However, this transaction is exempt from VAT if the following 2 conditions are met:

  • The sale is for theentirety of the goodwill elements
  • The purchaser is itself liable for VAT
Who shall I contact

During the sale, you can realize a capital gain which is the difference between the sale price and its original value.

We're talking about short-term gain if you have held the goodwill for less than 2 years.

Beyond 2 years, it is a long-term gain.

The taxation of capital gains differs depending on whether the company is subject to income tax (IR) or business tax (SI).

Subject to IR

If it is a capital gain short-term, the capital gain is added to taxable income under the conditions and at the rate of income tax.

If it is a capital gain long-term, the capital gain shall be imposed on the single flat-rate levy (PFU) at 30%, which means:

  • 12.8% income tax,
  • 17.2% in respect of social security contributions.
Subject to SI

There's no no distinction between short-term and long-term capital gains.

The capital gain shall be taxable at the normal rate of business tax.

It exists multiple plans exemption from capital gains tax.

Disposal price exemption

You benefit from a capital gain exemption depending on the selling price :

  • If the price is less than €500,000, your exemption is total.
  • If the price is between €500,000 and €1 000 000, your exemption is partial.
  • If the price is equal to or greater than €1 000 000, you do not have any exemption.

You must have been active in the company for at least 5 years.

Exemption in case of retirement

You benefit from a total exemption if you meet all of the following:

  • You have been in the business for at least 5 years
  • Your company is subject to income tax (not at IS)
  • You're leaving retired and you claim your rights within 2 years of the assignment
  • Your company includes less than 250 employees and has a turnover of less than EUR 50 million.

Warning  

In the case of retirement, the capital gains exemption relates only to income tax, social security contributions and 17.20% remain due.

Exemption for VSEs on the basis of revenue

You benefit from a total exemption if you meet all of the following:

  • You have been in the business for at least 5 years
  • Your company is subject to income tax (not SI)
  • Your recipes are less than €250,000 (BIC) or €90,000 (NLC)

Above these thresholds, the exemption is partial if your recipes are:

  • Less than €350,000 (BIC) The exemption rate is calculated as (350 000 - revenue) / 100 000.
  • Less than €126,000 (BNC). The exemption rate is calculated as follows: (126 000 - revenue) / 36 000.

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