Simplified formalities for the transfer of the business – suppression of some mandatory information.

A new French statute No. 2019-744 of “simplification, clarification and update of corporate law” of July 2019 impacts the regime of civil and commercial companies and that of the sale of the businesses.

As far as the sale of businesses is concerned, the new statute enters into force on the 21st of July 2019 and makes two changes.

First, the law repeals sect. L. 141-1 of the French Commercial Code and thus puts an end to the traditional formalism of the sale that was in force since 1935. The deed of sale previously had to include a series of provisions (name of the previous seller, date of the previous acquisition, price allocation, liens and pledges, turnover and operating results, information on the commercial lease), and failing to do so, the purchaser was entitled to claim the sale was void.

Second, the law also repeals sect. L. 144-3 French Commercial Code, and thus removes the condition requiring the business to be operated during two years before any lease-management.