Company transfer: donation of shares to a partner
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
Legal situation that third parties cannot ignore and must respect, even if they are not signatories
Flat-rate or proportional reduction applied on the basis of a tax calculation (income, value of property, etc.)
A business which participates actively in the conduct of group policy and the control of subsidiaries and provides, where appropriate and purely internally, specific administrative, legal, accounting, financial and real estate services.
Minimum number of persons present or represented for a vote or decision to be valid
The shares are title to the share capital of the business. Each share represents a fraction of this capital and gives its holder the status of partner (shareholder in the SA). Thus the donation of actions means that a shareholder (the donor) passes on to a beneficiary the rights he holds in the company's share capital. Regardless of the legal form of the company, this operation must follow a number of steps.
What applies to you ?
In principle, the donation of shares in SAS or SA is freeHowever, the law does not provide for any approval procedure.
However, statutes may contain specific clauses to restrict transmission possibilities.
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Accreditation clause
The approval clause allows share donations to be submitted to the agreement of the members, unanimously or by a majority of them.
In the case of an SAS, the authorization clause may cover any type of donation of shares: to the spouse, to a descendant or ascendant, to a partner, to a third party.
A breach of the authorization clause shall render the donation void.
Preemption clause
The pre-emption clause offer to the member referred to in right of priority to redeem the shares you plan to sell.
Thus, this clause obliges you to offer the gift of your shares to the beneficiary partner before any donation to a spouse, ascendant, descendant or third party, etc.
A breach of the pre-emption clause shall not render the donation void.
However, you may be ordered to pay damages in compensation for the damage caused to the beneficiary.
Inalienability clause
The inalienability clause prevents the donation of shares for a period of 10 years maximum.
After this period, the shares shall no longer be held in immovable property and may be disposed of freely.
SA
Accreditation clause
The approval clause allows share donations to be submitted to the agreement of the shareholders, unanimously or by a majority of them.
In the SA, the approval clause has limited scope, it shall apply only to gifts of shares to shareholders and third parties.
Thus, donations to the spouse, ascending or descending remain free.
A breach of the authorization clause shall render the donation void.
Preemption clause
The pre-emption clause offer to the member referred to in right of priority to redeem the shares you plan to sell.
Thus, this clause obliges you to offer the gift of your shares to the beneficiary partner before any donation to a spouse, ascendant, descendant or third party, etc.
A breach of the pre-emption clause shall not render the donation void. However, you may be ordered to pay damages in compensation for the damage caused to the beneficiary.
The important thing is refer to the statutes to find out how free you are to sell your shares.
In the context of a donation of shares, the writing of a written not obligatory.
The transfer of ownership of the shares takes place by bank transfer.
The registration of the shares in the account of the beneficiary makes the donation enforceable business and third parties.
On the other hand, it is strongly advised to record the donation in writing for reasons of evidence in case of dispute.
Thus, the deed of gift of shares mentions the following :
- Identity of the parties
- Number of actions transmitted
- Value of shares
- Method of payment
- Time limit for transfer of shares
Purpose of the guarantee
Unlike the sale of the goodwill alone, the donation of shares implies the transfer of the assets, but also liabilities (debts) of the company.
As a donor, you give up your rights and duties.
The appearance of unknown debts at the time of the donation is a major risk that the buyer must avoid to ensure the company's sustainability.
By the asset-liability guarantee clause, you undertake to guarantee the accuracy of all information provided to the buyer: company activity, social accounts, customers and suppliers, salary costs, possible participation in other businesses, ongoing disputes, etc.
This guarantee clause allows the purchaser to protect himself against:
- The Discovery of a Liability which had not been declared at the time of the donation (this must be a debt prior to the donation and revealed after the donation)
- Incorrect valuation of the asset whose value is ultimately lower than agreed
If one of these assumptions is confirmed after the donation of the shares, the buyer can activate the guarantee to obtain a compensation on your part.
References to the guarantee clause
The asset-liability guarantee clause shall contain the following information:
- Departure Date of the guarantee: the date from which the earlier or later origin of the debt can be assessed.
- Duration of the clause: between 3 and 5 years.
- Calculation of compensation: the percentage of the debt that you are committing to bear. This percentage may decrease over time.
- Floor Amount Warranty: The amount from which the warranty can be activated.
- Ceiling Amount of compensation: the maximum amount to which you are committed. You won't have to pay more than that.
- Implementation arrangements : additional information needed to implement the guarantee (justification of the liability, modalities for sending the claim, etc.).
Gift established by an act
The recipient of the gift must register the deed of gift with the registration tax service of the beneficiary's domicile.
He must therefore deposit, on the spot or by post, the donation document (in 2 copies) and the payment of registration fees (by check or transfer) within a period of 1 month from the date of the deed of gift.
Who shall I contact
Donation not established by an act
If it is manual donation of securities (without the use of a written document), the recipient must declare the donation received within 1 month from the date of donation:
- or via the online service available in your personal area, under the report section. One instructions for use is at your disposal.
Taxes: access your Special Space
- or by means of Form No 2735 together with the payment of any fees, to be deposited at the registry office of the domicile of the beneficiary
Declaration of manual donation and donation of money
- or by means of Form No 2734 allowing deferred payment of fees, to be deposited at the registry office of the domicile of the beneficiary. This approach is open to manual donations of a value greater than €15,000.
Revelation of a manual donation worth more than €15,000
Who shall I contact
When you make a donation, the tax authority collects a registration fee, a tax called gift tax.
Donation fees are paid by the purchaser. However, you can decide to take them at your expense, the amount of duty shall not be considered as a donation supplement.
To calculate this tax, the tax department of the registration proceeds as follows:
- It takes into account the value of the gift
- He then deducts from this first value the amount of any deductions
- Finally, it applies a tax scale to the value found. This rate varies according to the relationship between the donor and the donee.
The amount of the rebate and the tax rate vary depending on the relationship between the donor (you) and the donee.
Example :
You give one of your associates your securities worth €320,000No, that's the value of the donation. You and your partner don't share no relation, which has 2 consequences:
- No abatement cannot be deducted
- The scale of taxation shall be 60%
Thus, you or your partner (at your choice) will have to pay a transfer fee equivalent to 60% of €320,000, or €192,000 of rights.
Additional specific discounts are available in 2 special cases.
Pact Dutreil
The transmission of family companies is facilitated by the Dutreil system, which gives the right to partial exemption donation rights, up to 75% of the value of the securities transmitted.
In other words, only a quarter (25%) of the value of the company will be taken into account to calculate the amount of the gift tax.
The Dutreil Pact applies if 4 cumulative conditions are respected:
- You have entered into an agreement with one or more partners collective conservation commitment securities, for a period of at least 2 years. We're talking unilateral commitment if you are a unique partner. This commitment must be in effect on the date of transmission. In addition, it must cover at least 17%financial rights and 34% the voting rights of the business.
- Each recipient of the donation individually commits retain titles for 4 years. This period shall begin to run on the expiry of the collective (or unilateral) undertaking.
- One of the beneficiaries or partners signing the collective commitment must exercise its main activity or a position of director in the business during 3 years. This period shall begin to run on the expiry of the collective (or unilateral) undertaking.
- The company shall exercise industrial, commercial, craft, liberal or agricultural activity. This condition must be satisfied from the conclusion of the 2-year collective conservation commitment until the end of the 4-year individual conservation commitment by each of the beneficiaries.
The Dutreil scheme also benefits host holding businesses whose main activity is active participation in the conduct of their group's policy. On the other hand, companies which have as their object the management of a movable or immovable property (for example, SCI) are excluded of the device.
Please note
This benefit is combined with the allowance to which the recipient of the gift is entitled, given his relationship with you.
Early transmission
If you have under 70 at the time of transmission, a further reduction of 50% transfer duties apply to the taxable part of the donation.
The mechanism of early transmission is combined with the possible reductions and advantages of the Dutreil Pact.
In the case of gifts of shares, the statutory amendment is not not systematically obligatory.
It is required only where the articles of association lay down the allocation of the share capital or the identity of the shareholders.
Where it is necessary to amend the articles of association, the terms of the amendment vary according to social form.
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The articles of association must lay down the conditions for their amendment:
- Body empowered to take the decision (Chairman, Governing Board, General Assembly)
- Number of votes required
- Quorum required (in the case of a decision taken at a general meeting)
Warning
in the absence of any details in the articles of association, the unanimous agreement of the members is required.
SA
Amendments to the statutes must be made in special general meeting (AGE)
Any change requires a qualified majority of 2/3 the votes of shareholders present or represented.
The amendment of the articles of association is not subject to any amending registration to the RCS, nor to insertion in a medium of legal announcements.
Please note
where the amendment of the articles of association is not necessary, it is sufficient to enter the donation in the transaction register which lists all the securities transfers that have taken place.
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