Buying the Business or Buying the Company: Asset Deal vs Share Deal in France

Asset deal vs share deal in France: what you are really buying

When the French business you want is operated through a company, the first structuring decision is not the price - it is the object. You can buy the business as an asset from the company (an asset deal over the fonds de commerce), or buy the shares of the company that owns it (a share deal). French law keeps the two strictly apart: the sale of all, or a majority, of a company's shares is not a sale of the fonds de commerce on its balance sheet. The company remains the owner of its business; only the shareholders change.

The choice decides which debts you take, what duty you pay, how long the deal takes, and what happens to the contracts, the employees and the licences. This guide takes each difference in turn, so you choose on the facts of the target, its history, its lease, its licences, each side's tax position, and not by habit.

What an asset deal transfers - and what a share deal leaves in place

The asset deal. You acquire the elements listed in the deed: the clientele, the right to the lease, the name and sign, the equipment, the stock, the licences. Where the deed is silent, only the sign, the trade name, the lease right, the clientele and the passing trade pass by default (C. com. Art. L 141-5). The seller's receivables and debts stay behind unless expressly transferred - a receivable binds the debtor once notified (C. civ. Art. 1324), a debt moves only with the creditor's consent (C. civ. Art. 1327). The purchase follows the procedure of Articles L 141-2 to L 141-22 of the Commercial Code: a deed, publication, creditor oppositions, and a price blocked in escrow.

The share deal. You acquire the company - and through it, indirectly, everything the company owns and owes. Nothing changes at the company's level: its contracts, its lease, its licences, its employees, its debts and its litigation all remain exactly where they were, inside the entity you now control. None of the fonds de commerce procedure applies. The deal is done by a share-transfer agreement, and the buyer's protection comes from that contract, the representations, the warranties and the liability guarantee, not from the statute.

The asset route also scales below the whole company in a way the share route cannot. The fonds is in principle one movable whole, not sellable in slices - but the sale of an autonomous branch of activity carrying its own clientele is itself a sale of a fonds (the courts have said so of the café-bar branch of a mixed business). A buyer can therefore take one branch and leave the rest, something no transfer of the company's shares can replicate. The discipline is on the seller's side: successive sales of separate elements to the same buyer can be recharacterised by the tax authorities as a disguised sale of the whole fonds, with the duties that follow.

One limit polices the boundary. The separation of company and fonds protects deals done in substance, not asset-stripping in corporate form: where the acquirer of a controlling block in reality appropriates the company's fonds - as in the clinic case, where the new controlling shareholder had the authorisation to operate all the clinic's beds transferred to its own establishment, stripping the company of the essential element of its business - the courts will draw the consequences.

Liabilities: the decisive difference between asset deal and share deal

Ask one question first: how much of the target's past are you prepared to own?

In an asset deal: almost none. The debts stay with the seller unless a creditor agrees to a transfer, and the publication, opposition and escrow rules exist so the seller's creditors are paid out of the price, not out of your business. Two exceptions to plan for. The buyer can be jointly liable for the seller's taxes on the business, up to the amount of the price, for 90 days from the seller's results return - reduced to 30 days where the seller's filings and tax record are in order (CGI Art. 1684); the escrow covers that window. And where the deed transfers a specific debt with the creditor's consent, the seller remains liable alongside the buyer unless the creditor expressly releases it (C. civ. Art. 1327-2).

One asset-route exposure is registered on a public file and often missed: charges inscribed against the fonds itself. Where the business sold is pledged (nantissement) or carries the registered lien of an earlier unpaid seller, the registered creditors hold a right of pursuit - they can have the fonds sold at auction to be paid (C. com. Art. L 143-5), though never appropriate it (C. com. Art. L 142-1) - and that right follows the fonds into your hands. The buyer's protection is the purge procedure, which clears the inscriptions against payment out of the price; a fonds bought without checking and purging the registrations is a fonds that can still be auctioned under you. In a share deal the same inscriptions may exist, but nothing changes hands at the company's level - the analysis moves into the diligence and the price.

In a share deal, the answer is: all of it. Every liability the company has incurred, known, disclosed or neither, stays in the company you now own: tax reassessments over past years, disputes not yet filed, warranty claims from earlier trading. The protection is the contract: proper due diligence, and a liability guarantee from the sellers (representations and warranties with an indemnity). The difference shows in the price: in a share deal the buyer pays less, or negotiates harder, because the risks of the past come with the company; in an asset deal those risks stay with the seller.

Procedure and calendar: why the asset deal takes longer

The fonds de commerce sale runs on a statutory calendar the parties cannot shorten; the share deal runs on the calendar the parties negotiate. Step by step:

Three notes complete the table. The asset-route deed can be a private deed, but where the sale includes the commercial lease and the lease requires assignments by notarial deed, the whole sale must be notarised - a clause to find before the timetable is promised. The mandatory particulars the deed used to carry were repealed in 2019 (law 2019-744, former C. com. Art. L 141-1), so on both routes the protection now runs through disclosure, representations and, asset-side, the general duty of Article 1112-1 of the Civil Code. And the town-hall step is strictly an asset-route risk: the DIA is prescribed on pain of nullity of the sale, with the annulment action open for five years - a share transfer does not pass through the commune at all.

The practical consequence: in an asset deal, months separate signing from payment, because the law says so. A share deal can sign and pay the same day. Speed is a real argument for the share route - but you pay for it by taking the company's past.

Asset deal or share deal: which fits your French acquisition?

Pick the statement closest to your situation - the check shows which route usually fits, and the point to verify before committing.

Registration duties: what each deal costs the buyer

The duty gap is the most quoted argument in the asset-vs-share conversation, and it is real - with traps on both sides.

Asset deal. The fonds purchase attracts duty as soon as the price exceeds €23,000: 3 % on the fraction between €23,000 and €200,000 and 5 % above (CGI Art. 719). The buyer owes it unless the deed shifts it, and vis-à-vis the tax office the parties are jointly liable for it regardless of the deed. A "successor agreement", any agreement for value letting a person step into a predecessor's position - pays the same duties even without a transfer of clientele (CGI Art. 720), and successive sales of separate elements to the same buyer can be recharacterised as a disguised sale of the whole.

Share deal. Transfers of unlisted shares (actions - SAS, SA) attract 0.1 %. Transfers of parts sociales (SARL and other non-share companies) attract 3 %, after an allowance of €23,000 prorated to the fraction of the capital sold. And transfers of participations in real-estate-preponderant companies attract 5 % - the regime that catches targets whose value sits mainly in French property (CGI Art. 726; minimum duty €25).

Read the gap correctly: for a trading company in SAS form, the share route's 0.1 % is a fraction of the asset route's 3–5 % - but the duty is one line of the deal's economics, next to the liabilities taken, the guarantee negotiated and each side's tax outcome. Cheapest duty is not the same thing as cheapest deal.

Compare the duty: asset deal vs share deal on your numbers

Enter the price and the target's form - the comparator computes the buyer's registration duty on each route (CGI Arts. 719 and 726).

Contracts, employees and licences on each deal route

Contracts. In an asset deal, contracts are not elements that follow the fonds automatically: a contract moves only by the mechanisms of the Civil Code, assignment of the receivable with notification (Art. 1324), transfer of the debt with the creditor's consent (Art. 1327), or under a rule specific to the contract concerned; the lease is the standout element that passes with the fonds. In a share deal, contracts do not move at all: the company remains party to every one of them. The check that matters there is inside the contracts - change-of-control clauses that let the counterparty terminate or renegotiate when the shareholders change.

Employees. The workforce follows the business, not the deal structure: on the transfer of the business, employment contracts in progress continue with the new operator by operation of law (C. trav. Art. L 1224-1) - an asset deal does not shed the staff. In a share deal the question does not arise: the employer is the company, and the employer has not changed. Either way, the headcount, the accrued liabilities and the seniority come with the operation and belong in the diligence.

Licences and authorisations. In an asset deal, a licence is a component of the fonds, and its transfer runs through the formalities its own regime imposes - a step to secure before signing: if the licence does not transfer, the business you bought cannot operate. In a share deal the company keeps its authorisations; what needs checking is whether any of them is personal to the current owners or sensitive to a change of control.

The seller's side of the asset deal vs share deal choice

The buyer does not choose alone - the structure changes the seller's outcome too, which is why it is negotiated, not decreed.

On an asset sale, the seller's tax year closes early: immediate taxation of the period's profits and of the gains on the assets sold, under the professional capital-gains regime - softened, for qualifying sellers, by the exemption regimes: value-based up to €500,000 fully and €1,000,000 partially (CGI Art. 238 quindecies), receipts-based for small businesses (CGI Art. 151 septies), and the retirement regime with social levies remaining due (CGI Art. 151 septies A). The seller then waits out the escrow calendar to be paid. The seller's asset-route calendar is statutory and unforgiving:

• publication of the sale within fifteen days - it starts every other clock;
• notification of the sale to the administration within 45 days of publication, results return within 60 (CGI Art. 201);
• escrow release at 105 days from the deed, 165 if those filings are late (C. com. Art. L 143-21), with the buyer's joint tax liability at 90 days rather than 30 for as long as the filings are not in order (CGI Art. 1684).

On a share sale, the seller disposes of a private asset, the shares, under the tax regime of its own situation, is paid on completion, and typically remains bound by the liability guarantee for years. The seller wants cash now and no guarantee; the buyer wants a clean asset at a lower price. The structure is where the two meet. Agree it before the letter of intent - every document that follows depends on it.

Which liabilities follow the route you are choosing?

Two answers show what comes with the deal and where your protection has to come from.

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. The asset-vs-share choice depends on the target's facts and each party's position. Always seek qualified legal advice before signing a letter of intent.