Selling a business in France: how do you prepare a fonds de commerce sale?

Three key points

• Selling a fonds de commerce and selling shares in the company operating it are different transactions.
• The lease, employees and essential contracts must be reviewed before a firm completion date is set.
• The buyer’s payment may remain temporarily unavailable to the seller while creditor protections and tax obligations are dealt with.

A fonds de commerce is a collection of assets used for a commercial activity and its customer base: a trading name, lease rights, equipment and other operating resources, as appropriate. The customer base is an essential element. It is broader than the accounting concept of goodwill. The cédant is the seller and the cessionnaire is the buyer. This guide concerns an ordinary negotiated sale, rather than a sale organised within formal insolvency proceedings.

A practical situation

Fictional example. You are selling a business operating from leased premises. The buyer is financing the acquisition with a loan and wants to keep your trading brand, which belongs to a network. The price is agreed, but the bank has not yet approved the loan and the network agreement does not permit a free transfer. Signing without addressing these issues could leave the buyer with an acquisition it cannot finance or operate as intended.

1. What exactly are you selling?

Start with an inventory. The sale agreement must identify intangible assets, such as the trading name, and tangible assets, such as equipment. Check that the seller owns them: leased equipment or assets held under a credit-bail finance arrangement cannot be treated as the seller’s property.

Stock is generally valued separately using an agreed method and inventory. Domain names, website access, telephone lines and booking tools should also be listed. Arranging their practical transfer avoids discovering after handover that the buyer can no longer receive orders.

A fonds de commerce sale does not, as a general rule, transfer all the seller’s debts and receivables. Nor does it include ownership of the premises. Specific agreements, statutory liability rules and the seller’s circumstances still require analysis: the absence of a general transfer of debts does not remove the need to investigate risks.

If a company owns the business assets, the price belongs to that company. Its shareholders are not selling their shares and do not personally receive the asset sale price. The company’s future and any later distribution of funds are separate issues. For a sole trader, the sale of a fonds de commerce must also be distinguished from a universal transfer of the professional estate (transfert universel du patrimoine professionnel).

2. Which issues may determine whether the buyer can operate?

The French commercial lease (bail commercial) is often crucial. It specifies permitted activities, rent, charges, works and transfer conditions. A clause prohibiting assignment of the lease to the buyer of the business is treated as unwritten under French law. That does not permit the parties to ignore lawful lease formalities or conditions: the landlord’s participation, notification or particular signing arrangements may need examination.

Also check the remaining term and any arrears or disputes. An activity outside the permitted use does not become authorised simply because the business is sold. Where landlord approval or a lease amendment is required, obtaining it should be organised before the buyer becomes unconditionally committed.

Existing employment contracts may continue with the buyer where the statutory transfer conditions are satisfied. Identify the employees concerned, their length of service, remuneration, leave and applicable collective commitments. The buyer’s preferences alone cannot determine which employees transfer.

Other contracts follow their own rules. A franchise, distribution or supply agreement does not automatically transfer simply because the fonds de commerce is sold. Check required consents and the terms of any new relationship. Licences and administrative authorisations also need review: the seller holding one does not guarantee that the buyer can use it immediately.

3. How should the agreement be organised before completion?

A letter of intent can record negotiating points: scope, price, timetable, confidentiality and any exclusivity. Its legal effect depends on the wording; its title alone does not determine whether the parties are already bound. Distinguish immediate commitments from matters still requiring further agreement.

Due diligence is then used to check the relevant documents: accounts, turnover, lease and amendments, essential contracts, employees, ownership of equipment and security registrations affecting the business. It can confirm the financial assumptions, identify matters requiring correction or lead to revised transaction terms.

The preliminary agreement may contain conditions suspensives: events on which completion depends, such as obtaining a specified loan or necessary authorisation. It should state who undertakes the steps, by when, with what evidence and what happens if the condition fails. A general sentence about financing may leave significant room for disagreement.

The parties should also address the period before completion: ordinary-course operations, information to be provided, an insured event, inventory and support for the buyer. Any non-compete clause must be tailored to the activity, duration and territory concerned. These provisions should protect the transaction without imposing disproportionate commitments.

4. Which steps must be anticipated before the sale?

Employee information requirements must be checked against the characteristics of the business and sale. For sales covered by the 2026 reform, the relevant advance information procedure now provides for a one-month period within its scope. Earlier completion may be possible where the statutory conditions are met. Older templates systematically referring to two months therefore need review.

This information enables employees to submit an offer; it does not give them a general priority right over the chosen buyer. It must be distinguished from information and consultation of the comité social et économique (CSE), the French employee representative body, where required. The mere presence or absence of a CSE does not resolve every timing issue.

The business may also be located in an area subject to the municipality’s commercial pre-emption right, allowing it to step into the buyer’s position under the applicable rules. Check the local position and make any required advance declaration. This should be examined early enough to avoid an unrealistic completion date.

Finally, both parties must have the necessary internal approvals. If either is a company, check the signatory’s authority and required corporate decisions. The buyer’s financing should cover the price, fees, transfer taxes, any stock and the working capital needed to begin operating.

5. What happens at completion and afterwards?

The final agreement records, among other things, the assets sold, the price and its allocation, payment terms, the date the buyer takes over and the parties’ commitments. Handing over the keys should include effective delivery of the resources needed to operate: inventories, documents, access credentials and relevant readings. Insurance and operational contracts must be coordinated with that date.

Tax registration and the required publications must then be arranged within the applicable periods. The sale is subject in particular to legal notice within fifteen days and publication in the Bulletin officiel des annonces civiles et commerciales (BODACC), France’s official civil and commercial notices bulletin. These steps inform the seller’s creditors, among others.

Creditors have a statutory ten-day period following the last required publication to oppose payment of the price. This opposition does not automatically cancel the sale. It prevents the price from being treated as immediately available and requires the claims and their settlement to be examined.

An escrow arrangement (séquestre), with a professional temporarily holding the funds, is commonly used. Release also depends on security registrations, creditor oppositions and tax risks to be addressed. There is no universal release date: the seller should plan its funding needs without assuming that the entire price will be available at signing.

Does selling the business close the seller company?

No. The company continues to exist. Its continuation, new activity or dissolution must be considered separately, with the legal and tax consequences. Business registration formalities must reflect its actual position after the sale.

Is the full price a net receipt for the seller?

Not necessarily. Borrowing, creditors, costs and taxation may affect the amount ultimately available. Capital gains and any exemptions must be assessed according to the seller, its activity and the transaction’s conditions.

Scope of this article

General information about negotiated sales of a fonds de commerce in France. The timetable must be adapted to the lease, activity and business concerned. This guide does not replace a review of the agreements and supporting documents. Last legal review: 18 October 2026.

Please contact the firm if you would like to discuss your circumstances further.