Tutorat: the Seller Stays On to Train the Buyer of a French Business

Tutorat: the seller stays on to train the buyer of a French business

A business changes hands faster than the knowledge that runs it. To improve the survival of companies, small ones above all, after their takeover by a more or less experienced buyer, French law organises a skills-transfer mechanism between seller and buyer: the tutorat (C. com. Art. L 129-1). The seller who has just sold the fonds signs on, for a fixed period, to pass its experience and professional skills to the buyer - the accounts, the sales methods, the clients and suppliers, and in practice the introductions no deed can convey. Done properly, it is papered in a contract with mandatory terms, signed within sixty days of the sale, and designed alongside the deed so each party knows what happens if the other lets go.

This guide covers the whole mechanism as the texts define it: who can be a tuteur, what the contract must say and when it must be signed, how (and whether) to tie it to the sale itself, and the pay, pension and social-security rules that decide what the arrangement costs.

What a tutorat is - and who can sign one

The definition. After selling the fonds de commerce it owned, in its own name, or in full ownership or usufruct with its spouse and unemancipated minor children, a natural person may conclude with the buyer an agreement to perform a temporary tutorat: transmitting to the buyer the experience and professional skills it acquired, for pay or for free (C. com. Art. L 129-1; décret 2007-478, art. 1). The tutorat actions performed under the agreement are a supply of services (décret 2007-478, art. 2).

Which deals it fits. The law sets no size threshold for the company sold. In practice the mechanism, bounded in time as it is, suits SMEs: where control of a large business with substantial turnover and many employees changes hands, the transmission of the seller's personal know-how matters far less. The typical configuration is the one the statute was written for: a retiring owner-operator, a buyer new to the trade or the town, and a clientele used to one face behind the counter.

What the tutorat contract must contain - and by when

The mandatory content. The contract must set out (décret 2007-478, art. 3):

• the content of the actions the tuteur will perform for the buyer - which can cover, among other things, financial and accounting management, sales methods, and the management of clients and suppliers;
• the practical arrangements of those actions and, where needed, the means the buyer puts at the tuteur's disposal;
• the duration of the agreement, how it can be extended and, as the case may be, terminated early;
• where the tuteur is paid: the amount of the pay and the rules for reimbursing the expenses of the mission.

The deadlines. The contract must be concluded at the latest within sixty days of the date of the sale, and must be for a fixed term of at least two months and at most one year (décret 2007-478, art. 4).

Why the paper matters. The décret names no sanction for an incomplete contract. But the document earns its keep twice: a paid tuteur must send a copy of the contract to the social-security scheme for the self-employed (décret 2007-478, art. 5), and the written tutorat is useful evidence that the seller working alongside the buyer is not an employee of the business it sold - a requalification risk worth taking seriously, since the case law reads a monthly pay partly indexed on turnover as pointing to salaried work, not tutorat.

Setting up the tutorat: the choices that matter

Pick the question on your table - the check gives the rule and the drafting answer.

Linking the tutorat to the sale - the interdependence question

Why it decides real disputes. A buyer who wants the seller's services secured, the experience, the know-how, the presentation of the clientele, has every interest in making the sale and the tutorat interdependent. The default runs the other way: where the contracts are divisible, non-performance of one does not authorise a party to withhold performance of the other, and the end of one does not end the other; the reverse applies only if the contracts are interdependent - a principle the case law has stated for linked equipment-supply and leasing contracts and which carries over here.

The cautionary case. A share-sale deed transferred the titles immediately and had the seller accept full payment six months later, "in accordance with its undertaking to accompany the new management". The buyer refused to pay, arguing the seller had abandoned the accompaniment before the six months ran and that the mission was indivisible from the price. The buyer lost, condemned to pay the full price, because the seller's failure, even assuming it proven, could not release the buyer: the seller had not linked the two contracts (it waited out the six months before claiming the price); no accompaniment contract had ever been signed; nothing conditioned the price on the accompaniment - had it done so, the arrangement would have been concluded at the same time and annexed to the deed, and the buyer, who drafted the deed, could not have been mistaken on that; the only proposal on the table, a monthly fee partly variable on turnover, described salaried work, not accompaniment; and the deed's wording proved no interdependence. The decision concerned a sale of all the shares of a company, but the reasoning transposes to the fonds sale.

The drafting rule that falls out of it. If the buyer's price assumes the seller's presence, say so: sign the tutorat with the deed, annex it, cross-reference the obligations, and state the interdependence in terms. Silence leaves two divisible contracts - and a buyer paying full price for a seller who never shows up.

Money and the tutorat: pay, pension, social protection

Free pricing. The parties set the tuteur's remuneration freely - or agree the tutorat is unpaid. Expense-reimbursement arrangements belong in the contract's mandatory content.

Social protection. Where a remuneration is paid, the tuteur remains affiliated to the social-security regimes it belonged to before the sale (C. com. Art. L 129-1) - no new affiliation, no employee status.

Pension cumul. The seller who sells the fonds and draws its retirement pension can combine that pension with the tutorat pay - for a maximum of twelve months, counted in whole civil months: fractions of month before the agreement takes effect or after it ends do not count (CSS Art. D 634-13-2). The ceiling deliberately mirrors the tutorat's own maximum duration.

Tax. The statute does not say in which category the tuteur's remuneration is taxed. Given the nature of the mission, a supply of services by a person who is neither employee nor, any longer, the operator, the analysis generally retained is taxation as non-commercial profits (BNC). The point deserves a line in the contract file rather than an assumption at filing time.

Does a tutorat fit your deal?

Pick your situation - the check tells you what the mechanism does for it.

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 advice. Always seek qualified legal advice before committing.