Buying a Craft Business in France: Fonds Artisanal vs Fonds de Commerce

Buying a craft business in France: fonds artisanal vs fonds de commerce

Bakeries, butchers, garages, hair salons, plumbing and electrical firms - much of what foreign buyers purchase in France is not, legally, a commercial business at all. A craftsman's activity is in principle civil, not commercial, and the business he sells is a craft business (fonds artisanal), not a fonds de commerce. The two look identical from the street. They are not identical at the signing table: the statutory regime that governs the sale of a fonds de commerce, Articles L 141-2 to L 141-22 of the Commercial Code, with their publication and creditor-opposition rules, does not apply to the sale of a craft business.

The differences stop where most buyers expect them to start: the tax treatment of the two sales is in principle the same, and the town hall's right of pre-emption applies to craft businesses in the same conditions as to commercial ones. This guide explains what makes a business a craft business, why the register is not the test, which rules fall away on a craft sale, and why, when the qualification is uncertain, the prudent course is to run the sale as if it were a fonds de commerce anyway.

What makes a business a craft business (fonds artisanal)

The qualification does not come from the paperwork, the shop sign or the trade - it comes from how the income is earned. The courts apply three tests:

• Where the income comes from. The craftsman earns the greater part of his professional income from his own manual work. The trader earns mainly from speculation - on employed labour, on machines, on the value of materials bought and resold.
• Independence. The craftsman exercises his activity without being subordinated to a third party.
• Scale - indicative, not decisive. Headcount matters as an indication of whether the operation has outgrown the craft frame, but no number settles the question by itself.

The case law shows where the line falls. Held to be craftsmen: the mason who buys materials as his jobs need them and employs a small team; the saddler who lives from his manual work even though he runs a shop; the taxi driver with the single vehicle he drives himself; the plumber-heating engineer whose purchases and resales of materials came to 5 % of his operating result. Held to be traders: the entrepreneur in painting and glazing with nine employees, because the scale of the operation exceeded the craft frame; the manufacturer buying supplies in quantity; the pasta maker who employed nobody but drew his profit chiefly from his machines, his raw-material purchases and his investment in the shop.

The distinction can be difficult on the facts - a workshop that grows, hires and starts reselling shifts from civil to commercial without anyone signing anything, and the shift changes which sale rules apply. Two consequences for a buyer pricing a target. First, look at the trend, not the snapshot: a business that qualified as craft five years ago may sit on the commercial side today. Second, read the result the way the courts do - what part of the profit comes from the owner's hands, what part from the staff, the machines and the margin on goods. The answer decides the procedure at the end of this guide.

The register does not decide whether the business is a craft business

France registers craft businesses separately - historically in the trades register (répertoire des métiers), and since 1 January 2023 in the crafts section of the National Business Register (Registre national des entreprises, RNE), with the regional chambers of trades and crafts validating the entries. Registration there has been reserved to businesses employing fewer than eleven people, with statutory exceptions: a registered business crossing that threshold can keep its registration while employing fewer than 250, and a person employing fewer than 100 who takes over a fonds run by a registered person can register (law 96-603 of 5 July 1996, Art. 19, as amended).

None of this settles the legal nature of the business. The courts are consistent:

• craft-register registration does not by itself exclude trader status;
• absence of registration is only an indication of trader status, not proof;
• registration at the trade and companies register creates a mere presumption of trader status (C. com. Art. L 123-7);
• one business can have to register on both sides - a shop with a workshop behind it commonly does.

One more trap in the vocabulary: since the law of 5 July 1996, registered individuals and the managers of registered entities hold the "quality of artisan" (Arts. 19 and 21). That quality is a professional attribute - it says nothing about the legal nature of the activities carried on. A registered "artisan" whose profit comes from staff, machines and resale is a trader for the purposes that matter here, and the Cour de cassation's approach to the qualification remains the one set out above.

So do not qualify the target from its registration certificate. Qualify it from its accounts: where the income comes from, who does the work, what is bought and resold. The register follows the facts; it does not create them.

Selling a craft business (fonds artisanal): which rules do not apply

The sale of a craft business is subject to no special statute - and in particular not to Articles L 141-2 et seq. on the sale of a fonds de commerce. The Cour de cassation has drawn the practical consequence expressly: the publication requirements of the fonds de commerce sale do not apply to the sale of a craft business (Cass. com. 29 October 1963).

What that removes, concretely: no mandatory publication of the sale, and no statutory ten-day opposition window for the seller's creditors with its blocked-price mechanics. The sale runs under the general law of sale and the general law of contract - consent, capacity, disclosure (C. civ. Art. 1112-1), fraud.

What it does not remove:

• The clientele requirement. A craft business is still a business: what is sold is a clientele with the means of serving it. A "sale" of premises and tools with no clientele attached raises the same requalification questions as on the commercial side.
• The deed. Nothing obliges a written deed - and nobody sensible signs without one. The deed lists the elements sold, records the seller's disclosure, and carries the price allocation.
• The spouse. Where the business is community property, both spouses must consent to the sale and to collecting the price (C. civ. Art. 1424).
• The workforce. Employment contracts in progress continue with the new operator by law (C. trav. Art. L 1224-1).

On payment, the difference is real and works both ways. Because no statute blocks the price, a clearly craft sale can be paid at completion - no ten-day opposition window, no 105-day escrow. Because no statute blocks the price, nothing protects a buyer who pays a seller whose creditors then surface, either. The parties are free to agree an escrow by contract, and on any sale of substance that is what a careful buyer asks for - which is one more reason the prudent route below converges with the fonds de commerce procedure.

Is the business you are buying a craft business or a fonds de commerce?

Pick the description closest to the target - the check shows the likely qualification and what it changes for your purchase.

When in doubt, sell the craft business like a fonds de commerce

The advice comes straight from practice: where the nature of the activity is uncertain, comply with the fonds de commerce sale rules even though they do not, strictly, apply. The reason is the cost of guessing wrong.

Run a sale as a plain civil sale, and a court later holds the business was commercial: the sale skipped a mandatory publication regime, the seller's creditors were never given their opposition window, and the buyer paid a price the law said should have been blocked - with the payment exposed to the creditors as a result. Run the sale with the fonds de commerce formalities, and a court later holds the business was craft: nothing is lost - the formalities were not required, but they were not forbidden either, and every protection they give (publicity, a clean creditor process, a documented price) worked in the parties' favour.

The asymmetry decides it. For a borderline target, the growing workshop, the shop-plus-atelier, the trade business with real resale volume, the prudent sale looks like this:

• a written deed listing the elements sold and the price allocation;
• publication of the sale as for a fonds de commerce, opening the creditor-opposition window;
• the price held by an escrow agent until the windows close;
• the DIA filed with the town hall where the business sits in a safeguard perimeter - this one is not optional in any case, since pre-emption reaches craft businesses too;
• the seller's tax filings made on the sale calendar, since the tax treatment tracks the fonds de commerce sale in principle.

The extra cost is a publication and some weeks of patience. The risk avoided is a sale that can be attacked - or a payment that can be claimed twice.

The seller's preparation is the same on either side of the line: the disclosure file (accounts, the lease or occupation title, the licences, the staff, any disputes), the spouse's written consent where the business is community property, and, since nothing obliges the buyer to trust an unverifiable story, the documents that show the clientele is real: the order book, the recurring customers, the trading record. A craft seller who arrives with that file sells faster, at a better price, under either procedure.

Tax and the town hall: where the craft sale is treated the same

Tax. The distinction between selling a fonds de commerce and selling a fonds artisanal has, in principle, no tax significance: the two operations are subject to the same regime. The registration-duty scale applies above €23,000, 3 % to €200,000, 5 % beyond (CGI Art. 719), and the buyer owes it unless the deed shifts it. The tax net is wider than the legal category anyway: a successor agreement, any agreement for value letting one person step into a predecessor's profession or position, pays the same duties whatever the nature, civil or commercial, of the activity transferred (CGI Art. 720); doctors', vets' and dentists' practices are the textbook examples. Seller-side, the capital-gains exemption regimes apply on their own conditions - value of the business transferred (CGI Art. 238 quindecies), receipts thresholds (CGI Art. 151 septies), retirement (CGI Art. 151 septies A) - and a fonds artisanal is expressly among the assets whose sale on deferred payment terms can open the tax instalment plan of CGI Art. 1681 F.

The town hall. The perimeter is called a safeguard perimeter for local commerce and crafts, and it means what it says: inside a safeguard perimeter, the sale of a craft business is subject to pre-emption in the same conditions as the sale of a fonds de commerce (C. urb. Art. L 214-1). The declaration of intent to sell (DIA) must be filed before the sale, on pain of nullity, the annulment action running five years, and the commune has two months to take the deal. Whatever else falls away on a craft sale, this step never does.

The seller's tax calendar tracks the commercial sale too: the sale is notified to the administration and the results return filed within the statutory deadlines (CGI Art. 201), and the buyer's joint-liability rule for the seller's taxes, capped at the price, applies to the sale of the business with its 90-day window reduced to 30 where the filings are in order (CGI Art. 1684). A craft seller who files fast serves the buyer's safety and his own payment date alike.

Which procedure for your craft business sale?

Answer for your deal - the selector names the steps to run.

Frequently Asked Questions

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal or tax advice. Whether a business is craft or commercial depends on its facts. Always seek qualified legal advice before signing.