Donating a sole proprietorship to a family member: the steps to follow

This page outlines the gift of a sole proprietorship in seven steps, in the order it follows: choosing the type of gift, identifying what is being transferred, drafting the deed, registering it, paying the gift tax, publishing the transfer, and then declaring the cessation of business. The gift tax is calculated on the value transferred, less any allowances, and then the applicable tax scale is applied. The Dutreil agreement can partially exempt 75% of the business's value. For transfers occurring on or after February 21, 2026, the holding period is six years, compared to four years previously.

This page follows the Service-Public Entreprendre factsheet on donating a sole proprietorship (verified on 21/02/2026). For the Dutreil agreement, it follows the BOFiP (Official Bulletin of Public Finances) when the BOFiP and the factsheet differ (for example, regarding the holding period). The allowance and tax brackets are from economie.gouv.fr. The seven-step breakdown is that of this page; the factsheet does not number them.

The information sheet clearly states at the top that it does not apply to micro-entrepreneurs, and also mentions micro-enterprises and sole proprietors: if you are a micro-entrepreneur, you should verify the scope with the source. This page does not cover capital gains, employee information, the situation of a non-resident donor or donee, or the choice between different forms of gift.

The seven steps at a glance

Step 1: Choose the type of gift

The information sheet distinguishes three forms.

• The simple gift. It transfers ownership of the business assets. The document describes it as "in the presence of only one child".
• The gift-partition. She distributes the assets among the family members. If the business represents the majority of the estate, the beneficiary compensates the other heirs with a sum of money, the equalization payment.
• Gift of bare ownership. The donor transfers the bare ownership and retains the usufruct. Upon the donor's death, the usufruct ends and the donee becomes the full owner. The value of the bare ownership depends on the usufructuary's age, according to the scale in Article 669 of the French General Tax Code (CGI), which is reproduced in the information sheet.

This choice is examined based on your application.

Step 2: Identify what is being transmitted

The default regime is the universal transfer of business assets. It covers the assets and liabilities necessary for the business. Three points to note from the information sheet:

• the transfer of a debt requires the written agreement of the creditor; ;
• Debts related to social security contributions are not included in the transfer; ;
• A partial transfer remains possible, with elements transferred in isolation.

The information sheet adds that this regime is not valid if one of the parties has been subject to personal bankruptcy, which entails a ban on managing, directing, administering or controlling a business or company.

Step 3: Drafting the document

A deed of transfer must be drawn up (the information sheet calls it a "deed of transfer"). It must include, in particular:

• the intangible and tangible elements transmitted; ;
• the identity of the parties, the date and nature of the act; ;
• the conditions of the commercial lease; ;
• the agreement of the spouse, if the transferor is married under the community property regime.

Since July 21, 2019, the company's origin, the status of any liens, and the results of the last three financial years are no longer mandatory in the deed. However, including them remains advisable.

For buildings used for tertiary activities with a surface area of at least 1,000 m², an assessment of compliance with the obligation to reduce energy consumption, based on the latest OPERAT certificate, is attached to the deed.

Step 4: Register the deed

The deed is registered with the tax registration service.

The deed is filed in duplicate and the business transfer declaration form in triplicate. Payment is made in cash up to €300, by check, or by bank transfer.

Step 5: Calculate and pay the gift tax

The tax is calculated in three steps: the value of the gift, less any applicable allowances, and then the applicable tax rate. It is generally the responsibility of the recipient. The tax authorities accept that the donor may pay it (economie.gouv.fr).

In the direct line, a child benefits from a tax allowance of €100,000., This tax credit can only be used once every 15 years for gifts from the same donor to the same recipient (economie.gouv.fr, page written on 01/04/2026). Any excess is taxed according to the following scale, published by economie.gouv.fr:

The method for applying this scale to the taxable amount of your file should be verified with the source and with a notary. This page therefore does not specify the amount due.

The Dutreil pact applied to sole proprietorships

In the case of a Dutreil agreement, the information sheet indicates that the gift tax benefits from a partial exemption of 75% of the company's value: only the remaining 25% are included in the calculation. The BOFiP (BOI-ENR-DMTG-10-20-40-40, version of 10/08/2026) links this exemption to Article 787 C of the French General Tax Code (CGI). The conditions are cumulative:

The six-year duration is recent. The BOFiP indicates that it applies to transfers from February 21, 2026 (law no. 2026-103 of February 19, 2026). It was four years before.

The BOFiP (Official Bulletin of Public Finances) specifies two limitations. Firstly, the partial exemption does not apply to a business leased to an operating company; the BOFiP makes an exception for a business previously leased to an heir, donee, or legatee. Secondly, Article 787 C does not apply to single-member companies such as EURLs (limited liability companies) or SASUs (simplified joint-stock companies with a single shareholder), whose shares are governed by Article 787 B.

Breaking a commitment is costly. The beneficiary must then pay the additional gift tax due on the date of transfer, plus late payment interest. A surcharge is added in the event of deliberate non-compliance (BOFiP, § 140 and 150).

The information sheet also mentions a 50% reduction in gift tax if the donor is under 70 years old at the time of the transfer, under the same conditions as the Dutreil agreement. This page does not specify the amount: the conditions must be verified on your file, and a separate page addresses the gift of securities before age 70.

Step 6: Publish the transmission

Within one month of the transfer, the transferor publishes a notice in the Bodacc (Official Bulletin of Civil and Commercial Announcements) or in a legal notice publication, at their discretion. Creditors then have one month to object to the transfer. An objection does not prevent the transfer.

Step 7: Declare the cessation of business, the result, and the VAT

From a tax perspective, the cessation entails the immediate taxation of profits made since the end of the last closed financial year and the payment of VAT.

Numerical example (fictitious profile)

Situation. Hélène, a self-employed craftswoman for 15 years, is giving her business to her son Antoine. She values it at €500,000 in full ownership. Antoine has not received any gifts from her in the last 15 years: the €100,000 tax allowance is therefore fully available.

Issue. What is the taxable base with and without a Dutreil agreement?

Strategy. Compare the two taxable bases before signing. Example assumptions: only one donee, the available allowance, the conditions of the pact fulfilled and maintained, the exemption of 75 % applied before the allowance, and no reduction of 50 %.

Result.

In this example, the pact reduces the taxable base by €375,000. The amount payable is not specified: the applicable tax scale should be verified with the source and a notary. The order of calculation (exemption, then allowance) is an example only. Legal fees and the taxes related to the cessation of business described in step 7 are not included. The profile is fictitious, the values are hypothetical, and the calculation does not predict any specific outcome for your family.

What changes depending on your situation

• The date of transmission : before or from February 21, 2026, for the duration of the commitment of the pact.
• The type of gift : simple, shared ownership with compensation, or bare ownership.
• What the company includes : buildings, receivables, debts, lease-management funds.
• The donor's matrimonial property regime, which conditions the spouse's agreement.
• Previous gifts to the same beneficiary over 15 years.
• Your status (micro-entrepreneur or individual entrepreneur), the scope of which should be verified with the information sheet.

The rule depends on your situation. No results are guaranteed.