Transfer of business assets to employees: the steps involved, with the reform of July 2026

Before selling your business, you must inform your employees of your plans. According to the French government's public service website, the July 2026 reform reduces this notification period to one month before the sale agreement is finalized, down from two months previously. The penalty for failing to inform employees will be reduced to 0.5 times the sale price, compared to 2 times the previous amount. An employee may submit an offer, but it will not have priority.

This page outlines the steps involved in the sale, from informing employees to the seller's tax obligations. It is based on the government website's guide on selling a business to employees, which is intended for micro-enterprises and sole proprietors. If your business is operated as a company, verify the applicable rules with the relevant authority. This page does not cover the sale of company shares, the amount of the tax allowance (which should be verified with the relevant authority), or the calculation of your capital gains.

What will change with the July 2026 reform

Two points need to be checked with the official source before taking action: the date from which the reform applies to sales concluded around July 27, 2026, and the case of companies with 50 or more employees without a CSE.

Step 1: Inform the employees

Who is informed?. In a company with fewer than 50 employees, the employees themselves are responsible. In a company with 50 or more employees and a Works Council (CSE), only the Works Council is informed and consulted. In the absence of a collective agreement, it has one month to issue its opinion. The situation for a company with 50 or more employees but no Works Council should be verified with the relevant source. If the owner does not operate the business, the notification is sent to the operator.

When. No later than one month before the date of conclusion of the sales contract. This information must be renewed if the sale is concluded more than two years after the first notification.

How. By any means which provides a certain date of receipt. The document specifically mentions: a meeting with signature, a posting with a dated and signed register, an email whose method attests to the date of receipt, a registered letter with acknowledgment of receipt, a hand delivery against receipt, or the intervention of a bailiff.

Content. Your desire to sell the business and the possibility for employees to submit a takeover bid.

An employee's offer. It must be sent to you without delay. However, it "does not have priority over other offers.".

Cases without obligation. The company is in conciliation, safeguard, accelerated safeguard, receivership, or judicial liquidation. A sale to employees has already been announced as part of the social and solidarity economy within the previous 12 months.

Discretion. Failure by an informed employee to comply with this rule constitutes misconduct that justifies disciplinary action.

The penalty. The cap is 0.5% of the sale amount, compared to 2% before the reform. The nature of the penalty (fine or damages) should be verified with the source.

Step 2: The deed of transfer

A formal deed is required. If you are married under a community property regime, your spouse's agreement is necessary. For commercial buildings of at least 1,000 m², the assessment of compliance with the energy consumption reduction obligation must be attached to the deed.

The sale includes the transfer of the customer base, the brand, the trade name, and the lease, along with other elements listed in the information sheet. It does not automatically transfer operating debts, which remain your responsibility, nor the business premises: according to the information sheet, their sale remains possible if you own them. Inventory is valued separately and is not included in the value of the business.

Step 3: Registration and rights

The private agreement is filed immediately with the land registry. The notarial deed is filed within one month of signing. The registration fee schedule is as follows: 0 % up to €23,000, 3 % from €23,001 to €200,000, and 5 % above €200,000, with a minimum of €25. Detailed calculations are available on the dedicated fee schedule page. The cost is generally borne by the buyer. The deed may stipulate that the cost is borne by the seller or shared between them.

Dejection. The information sheet indicates that a reduction may apply to the value of the business before calculating the tax (Article 732 ter of the French General Tax Code), in the case of a purchase by an employee. Conditions cited in the information sheet: the employee has held a permanent employment contract (CDI) for at least two years, full-time (or has an apprenticeship contract in effect on the date of the transfer); the business has been operated by the seller for more than two years; the buyer continues the business and effectively manages the company for at least five years from the date of the takeover. The amount of the reduction should be verified with the source (text of Article 732 ter of the French General Tax Code) before any calculation. It is not included on this page.

Step 4: Advertising and creditors

In the event of an objection, the price is placed in escrow (by a lawyer or notary). The escrow fees are borne by the buyer, unless otherwise stipulated.

Step 5: Your tax obligations as a seller

The sale is considered a cessation of business activity and must be declared within 45 days of its publication in a legal notices publication. The income tax return must be filed within 60 days of the publication of the sale: form no. 2031 (BIC), no. 2035 (BNC), or no. 2065 (IS). The sale is exempt from VAT if it covers all the assets of the business and if the buyer is themselves liable for VAT.

Regarding capital gains, for a company subject to income tax, the net long-term capital gain is subject to a flat tax rate of 31.4% (12.8% income tax and 18.6% social security contributions), according to the public service information sheet on business capital gains. Exemptions exist; these are detailed on another page.

Funding the recovery

If employees lack the necessary resources, they can create a holding company for the takeover, tasked with securing the loan required to acquire the business. The "Objectif reprise" guide (entreprises.gouv.fr, April 2026) indicates that, for an employee buyout, 20% to 35% of the purchase price in equity is required. It also advises informing employees before signing a memorandum of understanding; otherwise, the legally mandated waiting period must be observed before finalizing the transfer.

Numerical example (fictitious profile)

Situation. Marc has been running a sole proprietorship bakery for nine years, with fewer than 50 employees and no ongoing insolvency proceedings. Sofia, his production manager, has been employed full-time on a permanent contract for six years. The business is priced at €420,000, excluding inventory. It is assumed that the market value is no higher than the price. The closing date is set for February 15, 2027.

Issue. Marc wants to know the dates to be respected and the rights to be expected, without relying on a priority offer from Sofia.

Strategy. Inform employees by means with a certain date of receipt, then run through the deadlines from the date of signature.

Result.

The dates are calculated arithmetic-based, without any carryover of non-working days. Fees are calculated on the price of the business excluding inventory, before any potential discounts. This profile is fictitious and does not reflect your specific situation.

What changes depending on your situation

• The size of your company and the presence of a Works Council (CSE), who decide who is informed.
• The date of conclusion of the sale, with regard to the date of application of the reform (to be verified with the source).
• The profile of the employee taking over the business : seniority, contract, full-time.
• A collective procedure is underway, which eliminates the obligation.
• The form of your farm (sole proprietorship or company).
• Your tax situation as a seller.

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