Selling or passing on a business in France: shares, goodwill and the Dutreil pact

Selling the goodwill or selling the shares

Selling the goodwill transfers the business itself: customers, trade name, lease rights, equipment and stock. The company or sole trader who sold it keeps its debts and settles them from the price. Selling the shares transfers ownership of the company, which continues with all its assets, contracts and liabilities; the buyer then usually asks for a warranty on liabilities.

The choice depends on the legal form of the business, its tax position, the lease, the contracts that must be transferred and the buyer's financing. It is made with the seller's accountant, who knows the accounts, and often with a lawyer for the warranty negotiations.

The stages of a sale of goodwill

Before the sale, the notary checks the commercial lease and its assignment clauses, any pre-emption right of the municipality, which has two months to decide when the business lies in a protected commercial area, and the seller's obligation to inform employees. For sales concluded since 27 July 2026, that information must be given at the latest one month before the sale, in the businesses concerned.

The deed states the turnover and results of the previous financial years and allocates the price between intangible assets, equipment and stock. After signature, the sale is published in a journal of legal notices within fifteen days, then in the official bulletin of civil and commercial announcements (BODACC). The seller's creditors then have ten days to lodge an objection on the price.

The price is held in escrow by the notary until the objection period and the tax deadlines have passed, then paid to the seller after settlement of any objecting creditors. Our French guide on selling a business sets out the timetable.

Selling company shares

A share sale is recorded in a transfer deed, then registered with the tax authorities within one month. The company's articles may require approval of the buyer by the other partners, or give them a right of pre-emption; for a SARL, a sale to a third party requires the approval of a majority of the partners holding at least half of the shares.

Since 27 June 2026, the sale of shares in a company whose assets are mainly real estate, such as most property companies (sociétés civiles immobilières), must be recorded in a notarial deed, a deed countersigned by a lawyer or, where authorised, a deed prepared by a chartered accountant, failing which the sale is void (article 1865-1 of the Civil Code). The notary checks the articles, the composition of the assets and the tax treatment of the gain, and registers the deed. Our French guide on sales of property company shares explains the new rule.

Passing the business on to your children: the Dutreil pact

The Dutreil pact exempts 75 % of the value of the shares of an operating company, or of a sole trader's business, from gift or inheritance tax (article 787 B of the General Tax Code). Only 25 % of the value is taxed, after the usual allowances, such as €100,000 per parent and per child. When the donor is under 70 and gives the full ownership, the tax due is further reduced by 50 %.

In return, the shares must be covered by a collective commitment to keep them for at least two years, signed before the gift; each beneficiary then undertakes to keep the shares received for six years; and one of the signatories or beneficiaries must run the company for three years. The company must carry on an industrial, commercial, craft, agricultural or professional activity; holding companies qualify only if they actively lead their group. The 2026 Finance Act amended the regime, and we check the rules in force at the date of your transfer.

• Collective commitment to keep the shares: at least two years.
• Individual commitment of each beneficiary: six years.
• Management of the company by a signatory or beneficiary: three years.
• Exemption: 75 % of the value transferred, plus a 50 % reduction of the tax for gifts in full ownership by a donor under 70.

Organising a family transfer

A gift-sharing deed (donation-partage) can divide the company between the children who will run it and give other assets to their brothers and sisters, with values fixed on the date of the deed. Parents can also give the bare ownership of the shares and keep the life interest, with voting rights arranged in the articles. When only some children wish to take over the business, these tools help preserve fairness between all of them.

The founder's spouse and matrimonial regime must be taken into account: shares bought with common funds are community property, and the spouse's consent is required in some cases. Our pages on gifts and estate planning and wealth planning with a French notary describe the overall approach.

Working with the owner's advisers, in France and abroad

A business transfer brings together several professions. The accountant prepares the accounts and the valuation, the lawyer negotiates the warranties and the employment aspects, the bank finances the buyer, and the notary drafts the deeds, holds the price in escrow and completes the formalities. Documents are shared with each adviser through a secure space.

Sellers, buyers or heirs who live abroad can sign the deeds through a notarial power of attorney granted by video call: see remote notarial signing. When a company holds French real estate or when the owner is tax resident abroad, we examine the French and foreign tax consequences with your advisers before the signature.