The Deed of Sale for a French Business: What Goes Into the Acte de Cession

The deed of sale for a French business: what the acte de cession does

The deed of sale (acte de cession) is where a French business purchase becomes real: the document that fixes what is sold, at what price, on what terms - and the document on which the whole post-signing sequence hangs, from the publication that starts the creditor clock to the seller's lien and the buyer's one-year warranty on the seller's statements. Since 21 July 2019 the law imposes no mandatory content (law 2019-744, former C. com. Art. L 141-1); what goes in is what the parties and their counsel decide to put in. That freedom is not a simplification - it moved the entire protective weight onto the drafting.

This guide walks the deed clause by clause: why it is always written even though no statute requires it, what a complete acte de cession contains in practice, the special regime guaranteeing the seller's statements, and the registration and publication steps that follow signature - with the sanction that makes them non-negotiable.

Why the deed of sale is always written - though no statute says so

Strictly, a sale of a fonds de commerce can now be concluded without a written act. No one does it, for four reasons that survived the repeal intact. The publication of the sale, the step that starts the creditor-opposition clock and unlocks the escrow calendar, requires a deed. The seller's lien for the unpaid price exists only if the sale is recorded in a deed and registered in time (C. com. Arts. L 141-5 and L 141-6). Where the lease requires assignments by notarial deed, the clause binds the sale of the whole business, and the deed must be notarised. And where the price is deferred, the notarial deed gives the seller an executory title - enforcement without first suing for judgment, a real advantage in a crédit-vendeur.

The fourth reason is the quiet one: since the statutory checklist disappeared, the deed's statements are the buyer's information and the seller's defence. What was disclosed, what was asked, what each side warrants - the deed is where the due diligence becomes contract. A thin deed does not make a simpler deal; it makes a poorer record of the same deal, owned by whoever later argues best.

The anatomy of the deed (acte de cession), clause by clause

Practice has settled the architecture the statute abandoned. A complete deed runs through:

• The parties - precisely. Identity, capacity and matrimonial position: a spouse's or PACS partner's consent where the business is common property, powers where a party is represented, and the take-over mechanics where the buyer is a company still in formation.
• The origin of the business. How the seller came to own it, purchase, creation, succession, with the chain that a later buyer, or the tax office, will want to trace.
• The lease, recited in full. The rent and its indexation, past revisions and riders, the deposit, any authorised change of use (déspécialisation), the technical diagnostics annexed to the lease, the renewal history, the managing agent - and, where the deal needs it, the rider or new lease agreed with the landlord.
• The operation and the staff. The activity, the operating record, and the employees attached to the business - who continue with the buyer by law.
• Safety and accessibility. The visit reports, prescribed works, any programmed-accessibility agenda or derogation request, and who performs what remains to be done.
• The elements sold - and the stock. The itemised list of what passes, with the stock taken over (valued, often by expert) or expressly left out: a fonds can be sold without its goods.
• The price and its allocation. The global figure and its ventilation between tangible and intangible elements - the split that feeds the registration duty and the publication notice.
• Payment terms. Cash at signature or deferred; any instalment schedule with promissory notes, with or without interest; the seller's lien registered - or expressly waived; the guarantees taken; and the escrow arrangement chosen for the blocked price.
• Ownership, enjoyment and the prorata account. The date the buyer takes ownership and possession, the split of running charges at handover, and the treatment of sums straddling the transfer.
• Charges, conditions and solidarity. The conditions precedent, the parties' undertakings, and any joint commitments.
• The non-compete clause. Optional in form, standard in practice: activity, territory, duration - the contractual floor built on the seller's statutory eviction warranty.

Two practice details from the standard drafting are worth flagging. On payment, the model clauses run the whole spectrum in options: a deposit already paid and imputed, promissory notes for instalments with or without interest, the seller's lien registered, or a recorded waiver of it, and a choice of escrow arrangements, including the mechanics for replacing the escrow agent. On the stock, the drafting always answers the question expressly: taken over at an expert-set value under its own payment terms, or excluded outright - silence is the one option good drafting never picks.

None of this is decoration. Every recital doubles as a seller's statement - and the next section explains what that costs when a statement is wrong.

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The seller's statements in the deed: guaranteed like hidden defects

Whatever the seller states in the deed, the seller guarantees. The regime borrows the hidden-defects rules: the seller answers to the buyer for the accuracy of its statements under the conditions of Articles 1644 and 1645 of the Civil Code, an inaccuracy being treated as a hidden defect (C. com. Art. L 141-3). Three features give the regime its bite:

• It cannot be contracted away. No clause restricts or excludes the guarantee: a stipulation that the buyer takes the business "as is, with no claim to indemnity or price reduction for any cause" does not bar the action; nor does an agreed "approximation" of the profits stated - the seller guarantees the figure written.
• Inaccuracy is measured strictly. Figures covering several businesses when only one is sold; turnover labelled tax-exclusive when it was tax-inclusive; profits not exclusively attributable to the activity sold, even where the buyer was told - each is an inaccuracy engaging the guarantee.
• The drafter can answer too. Intermediaries and deed-drafters who knew of the inaccuracy are liable jointly with the seller (C. com. Art. L 141-3, al. 2).

Note what the regime covers: inaccuracy, not silence. A statement made and wrong engages the guarantee; a subject never addressed in the deed is fought on other grounds - disclosure and fraud. That line is one more reason buyers push subjects into the deed: every topic converted into a written statement becomes a guaranteed one.

The buyer's side of the ledger is just as defined. The buyer proves the inaccuracy, proves it determined its consent, and proves a loss - a buyer who resold at a 15 % profit, or tripled the turnover within two years, had none. The action runs one year from taking possession of the business (C. com. Art. L 141-4) - a different and shorter clock than the two years of the general hidden-defects action, it starts at possession, not at the handover of the accounting documents, and it is interrupted by serving the writ on the seller, not by filing it at the registry. Within it, the buyer chooses: return the business against the price (resolution - not nullity: the ground is non-performance, not invalidity), or keep it and claim a price reduction; both can be pleaded together, the court picking by the gravity of the inaccuracy. A seller in bad faith owes damages on top (C. civ. Art. 1645), and fraud remains available even where the lies concern the deed's own statements.

After signature: registration and publication of the deed

Registration. The deed is registered at the tax office of the business's location, at the buyer's initiative and cost; without a deed, the sale is declared to the same office within a month of the entry into possession (CGI Arts. 635 and 638; C. com. Art. L 141-13). The nominal deadline is one month - but for a private deed the real one is shorter: registration must precede the publication, which itself must happen within fifteen days of the sale, so a privately signed deal registers in under fifteen days. The sequencing is the point to hold: tax office first, newspapers second, and both inside the same two weeks the escrow calendar already counts.

Publication. Two insertions make the sale public: a notice in a legal-announcements medium, then, within fifteen days of the sale, at the buyer's request to the registry, the notice in the official bulletin (BODACC), published within three days of the first insertion (C. com. Arts. L 141-12 and R 123-212). The notice states the date of the deed, the nature and seat of the business, the price with the valuation basis, in practice the tangible/intangible ventilation, the deadline for oppositions, and the election of domicile in the commercial court's district. Sales covering branches carry their own publication rule, fifteen days in mainland France and two months overseas (C. com. Arts. L 141-18 and R 141-1-1). The BODACC notice can be combined with the buyer's company-register filing in a single insertion.

The sanction. A buyer who pays the seller without the prescribed publication is not released against third parties (C. com. Art. L 141-17): the sale stands, publication defects never void it, but the payment is unenforceable against the seller's creditors, all of them, opposing or not, and the buyer can have to pay the price a second time. The rule is public order: a clause making the seller "responsible for any oppositions" changes nothing. The case law extends the sanction to incomplete publication, an omitted opposition-deadline line sufficed, while a merely late publication costs liability to the seller, not nullity.

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The lease inside the deed of sale

The lease usually travels with the business, and the deed carries the mechanics. The tenant's right to assign the lease to the buyer of the fonds is public order, no lease clause can forbid it, but the organising clauses are valid and bind the closing, from procedural formalities up to the notarial-deed requirement that captures the whole sale.

Opposability to the landlord is its own step: to be effective against the landlord, the assignment is served on the landlord by bailiff or accepted by the landlord in a notarial act (C. civ. Art. 1690) - the assignment being a right of the tenant, the landlord's consent is not what is sought; the notification is. And on the ground, an inventory of the premises' condition (état des lieux) is drawn up between the landlord and the incoming buyer at the entry into possession, as it will be again at restitution. The deed should fix who arranges the service, who pays for it, and when the état des lieux happens - three small lines that prevent three familiar disputes.

Where the buyer's plans go beyond the current lease, a fresh lease, or activities the current one does not allow, the landlord's written agreement belongs before the sale, in a rider or a new lease negotiated alongside the deed. The deed then recites it, and the closing checklist sequences it. A deed signed on the hope of a lease change is a renegotiation delivered to the landlord with the price already paid.

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. What a deed must contain depends on the business, the lease and the payment terms. Always seek qualified legal advice before signing.