Deed of transfer of a business (fonds de commerce)
The transfer of a business (fonds de commerce) is the sale of a set of tangible and intangible assets enabling the operation of a commercial activity: clientele, trade sign, trade name, lease rights, equipment, goods. It is an operation governed by the Code de commerce, which protects the buyer (mandatory disclosures on turnover and results) and the seller's creditors (opposition, escrow of the price). This deed records the identity of the parties, the description of the business, the price and its breakdown, and the warranties. It must be registered with the tax office and published in a legal announcements outlet. This form is in English, but the document is generated in French, ready to sign and use in France.
Note: the questionnaire is in English; the generated document is in French.
The seller (transferor)
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Frequently asked questions
Which disclosures are mandatory in the deed?
The deed must include essential information: the origin of ownership of the business, the status of liens and pledges, the turnover and operating results of the last three financial years, as well as the details of the commercial lease (date, term, name of the landlord). The absence of these disclosures may render the sale void.
Must the transfer deed be registered?
Yes. The deed must be registered with the tax office within one month of its signature. Registration duties are payable by the buyer, calculated in brackets on the price (with an allowance for the first bracket). The transfer must also be published in a legal announcements outlet and in the BODACC.
Why is the price placed in escrow?
The sale price is generally held in escrow (often by a legal professional) for a period allowing the seller's creditors to file an opposition and the tax authorities to exercise their rights. This mechanism protects the buyer against paying a price that could be claimed by creditors.
Does the transfer of the business include the lease?
In principle, the commercial lease rights are among the assets transferred with the business. The transfer of the lease to the buyer of the business generally cannot be prohibited by the landlord, but the landlord may be a party to the deed or be informed of it. Check the clauses of your commercial lease.
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