Did you know that in France…
- company shares can be transferred without the involvement of a French notary?
- all transfers of shares must in principle be registered with the French tax authorities? In this context, French law requires a registration fee to be paid by the purchaser representing 0.1% (SAS - French simplified joint-stock company) or 3% (SARL - French limited liability company) of the purchase price, depending on the form of the company acquired. The fee is as high as 5% for French companies whose assets consist mainly of real estate or participations in real estate transactions.
If you intend to purchase a French limited liability company (SARL) in France, you should always check and negotiate whether the SARL can be converted into a simplified joint-stock company under French law (société par actions simplifiée/SAS) before buying the shares. This is particularly relevant in view of the French registration fees mentioned above.
- the conclusion of a joint venture agreement between all partners/shareholders is common practice in France when only part of the shares or stock of a French company is acquired or the acquisition of the company in France is to take place in several stages? This French joint venture agreement governs future cooperation between seller and buyer in the French company being sold.
- the concept of the so called fonds de commerce (goodwill) is an established French legal concept in France? The French concept of a fonds de commerce encompasses all the movable, tangible and intangible components of a French enterprise that are interconnected by entrepreneurs in the course of their commercial activities. Under French law, the establishment of a fonds de commerce and, consequently, the possibility of its transfer through an asset deal is subject to registration of that fonds de commerce in the French commercial register. The only essential component of a fonds de commerce is the customer base of the French company. – A fonds de commerce does not include real estate and should not be confused with the registered office or place of business of the French company.
- due diligence calls for particular attention to the provisions of French labour law? In our experience, many prospective foreign buyers underestimate the distinct characteristics of French labour and social security law. It should also be noted that the termination possibilities of commercial leases (of the target company) are strictly regulated by law in France. Under French law, commercial leases of this type may be terminated under ordinary conditions by the tenant only after three or six years, and by the lessor only after nine years.
In more than 30 years of business across most countries in Europe, I have dealt with more than 50 law firms, large and small. I have come to appreciate the difference between lawyers that spent their time identifying and admiring problems and individuals that take an interest in their clients' objectives, circumstances, timelines and budgets. The vast majority of law firms and their representatives in my experience struggles with those positive attributes.
Elisabeth Walckenaer and Marianne Grange of EPP have been an absolutely incredible exception. We have been working together for a number of years and covered a variety of aspects starting from labor and contracts law, M&A activity all the way to compliance issues.
Elisabeth and Marianne have been exceptional and could not have anticipated my issues better, addressed my legal tasks most efficiently, made easy what appeared to be potential problems and simply been a service provider that I would consider priceless. I highly recommend them to anyone interested in hiring a law firm for their business.