Selling a French company to a foreign buyer is not only a matter of agreeing a price, signing a share purchase agreement and updating the ownership records. The transaction also has to follow the French employee-information rules that apply when a seller transfers control of a company. The timing changed in 2026. For the relevant sales concluded at least two months after the promulgation of the new simplification law, the direct employee-information period is now one month rather than two months, and the maximum civil fine has been reduced to 0.5% of the sale price. The practical start date is 27 July 2026.
The answer depends on four questions: is the transaction a sale of a majority holding, is the company a société par actions simplifiée (SAS, a simplified joint-stock company) or a société à responsabilité limitée (SARL, a private limited-liability company), does the company have a comité social et économique (CSE, the French employee representative body), and is the deal a share sale or a sale of the business assets themselves? A founder living abroad must also prove when each notice was received, coordinate documents across jurisdictions, and leave enough time for a French registry filing after closing. This guide sets out the decision path for a foreign buyer and seller, while separating the employee route from the corporate and tax formalities that follow the transfer.
I. When must a foreign seller inform employees before selling a French company?
A. Does the one-month rule apply to a majority share sale after 27 July 2026?
The first distinction is between a change of control through shares and a transfer of the business assets. If the founder sells more than 50% of the shares or voting securities giving access to a majority of the capital of a French company, the employee-information procedure may apply. In a SARL, the relevant object is generally a majority of the parts sociales, meaning the ownership units of the company. In an SAS or SASU, a société par actions simplifiée unipersonnelle (a one-shareholder SAS), the relevant object is normally a majority of the shares or securities that give access to the majority of the capital. A sale of 30% to a foreign investor does not become a majority sale merely because the investor receives board influence. The cap-table, voting rights and the rights attached to convertible or access securities must be checked separately.
The statutory change is found in Article 22 of Law no. 2026-403 of 11 June 2026 concerning the simplification of economic life, published in the Official Journal on Légifrance. The current version of Article L. 23-10-1 of the French Commercial Code states that, in the companies concerned, employees must be informed “au plus tard un mois avant la vente” so that one or more employees can present an offer. The official Article L. 23-10-1 text also preserves the possibility of completing the sale earlier if every employee has expressly stated that they do not wish to submit an offer.
The transition rule matters when the parties signed a letter of intent or a term sheet before the reform. The new period does not simply depend on the date of the first discussion with the buyer. The relevant question is when the sale is legally concluded, and whether that date falls at least two months after promulgation. Service Public Entreprendre summarises the new rule and its transition in its official notice on the simplification law: the amended regime applies to sales concluded after 27 July 2026. A non-binding indication of interest may therefore precede that date without necessarily fixing the applicable regime. A binding agreement, a completion mechanism and any condition precedent must be analysed together.
For a foreign buyer, the safest transaction calendar separates four dates:
- the date on which the seller decides to launch the controlled sale process;
- the date on which employees or the CSE receive the legally relevant information;
- the date on which the parties sign the binding transfer instrument; and
- the closing date on which the shares are transferred and the price is paid.
The contract should not use these words as if they were interchangeable. A signing date can create binding obligations while closing is delayed by a regulatory approval, a financing condition, a change-of-control consent or the completion of the employee process. If the drafting treats signing as the sale but the parties intend to transfer title only at closing, the timing analysis may become inconsistent. A French corporate lawyer should align the legal definition of completion, the conditions precedent and the information calendar before the buyer signs.
The direct employee route is not a general veto. The employee receives information and an opportunity to present an offer; the employee does not automatically receive a right to match the foreign buyer’s price, a right to obtain the company’s confidential data, or a right to stop the sale by refusing the transaction. The buyer can therefore remain the preferred bidder. The risk is procedural: if the information is late, cannot be proved, or is sent to the wrong recipients, the parties may face a dispute and a civil fine. The current statutory ceiling is 0.5% of the sale amount. It is a significant exposure for a high-value acquisition even though the percentage is lower than under the former regime.
The procedure is also subject to statutory exclusions. Article L. 23-10-6 of the Commercial Code excludes a transfer to a spouse, ascendant or descendant, companies in certain insolvency proceedings, and a transaction for which the employees were already informed during the preceding twelve months. The current Article L. 23-10-6 should be read before the parties assume that the one-month timetable is necessary. A foreign buyer acquiring from an unrelated founder will normally not benefit from the family-transfer exclusion. A distressed transaction must be examined under the insolvency rules rather than treated as an ordinary private sale.
The duration of the process also deserves attention. Under Article L. 23-10-5, the sale can generally be completed during the two years following the employee information. If the sale is not completed within the permitted period, a fresh analysis may be needed before the parties close. This provision is useful for a buyer that needs regulatory or financing time, but it does not turn an incomplete notice into a permanent safe harbour. The transaction file should record which information triggered the period, what sale it covered, and whether the economic terms changed so substantially that a new process is prudent.
The employee-information duty also has an internal communication rule. Where the owner is not the person directing the company, the owner must notify the company’s head, who then informs the employees. Where the head personally owns the participation, the direct notification route applies. A foreign holding company should not assume that sending a notice to the French subsidiary’s general email address is enough. The corporate owner, the French legal representative, and the employees must be mapped before the first notice is sent. This is particularly important where the foreign seller acts through a nominee, a family office, a trustee-like vehicle or a group treasury company.
The distinction between “majority of capital” and “majority of votes” can also become decisive. The statutory language covers shares or securities giving access to the majority of the capital. A transaction may include non-voting shares, preferred shares, warrants or instruments that are not exercised on signing. The buyer’s due-diligence team should obtain the current articles of association, the securities ledger, shareholders’ agreements, option plans and any instrument capable of changing the control calculation. The seller’s lawyer should explain the calculation in the transaction memorandum instead of relying on a single percentage copied from an old Kbis. A Kbis is the official extract from the French commercial register; it is useful evidence of the company’s registration, but it does not replace the company’s internal securities records.
Finally, do not confuse a share sale with a fonds de commerce sale. A fonds de commerce is the operating business as an asset package, usually including customer relationships, goodwill, equipment and certain contractual rights, rather than the shares of the company. The employee rules for a sale of a business may use different provisions, including Article L. 141-23 of the Commercial Code for the direct route and Article L. 141-28 for the CSE route. A foreign buyer planning an asset acquisition should not simply copy the share-sale notice. The legal object, the affected employer and the contractual perimeter are different.
B. What evidence must a foreign seller keep to prove a valid notice?
The central practical question is not only whether a notice was drafted. It is whether the seller can prove the identity of the recipient, the content delivered, the date on which the recipient received it, and the link between that notice and the sale that eventually closed. Article L. 23-10-3 provides that employee information may be delivered by a method defined by regulation that makes the date of receipt certain. It expressly gives the registered letter example: the relevant date is the date of first presentation. The wording is available in Article L. 23-10-3 on Légifrance.
A foreign seller should prepare an evidence pack before notification. It should contain the employee list used on the notice date, the version of the notice in English and French if both are used, the proof of dispatch, proof of receipt, the identity of the person signing for the seller, the corporate authority for that signature, and a short memorandum identifying the participation being sold. If a French representative sends the notice, keep the power of attorney and its translation. If an overseas director signs, retain the board resolution or written shareholder decision that authorises the process. If a foreign electronic-signature platform is used, export its audit trail rather than keeping only a screenshot.
The law does not make every informal email legally sufficient merely because the employee opens it. Email can be a useful supplemental channel, but a buyer should ask whether the chosen method creates a reliable receipt date for every employee. A notice sent to a shared mailbox, a message placed in an internal platform, or an email that is blocked by a security filter may create a factual dispute. The robust approach is to use the legally recognised method for the formal notice and then use email, a meeting and an internal announcement to make the information understandable. The file should state which channel is legally operative and which channels are courtesy copies.
The notice itself should identify the project without disclosing more confidential information than necessary. It should describe that a sale of the relevant majority participation is proposed, identify the seller and the company, explain that employees may present an offer, state the deadline or the legal method for calculating it, and provide a reliable contact for an offer. It should not promise that an employee offer will be accepted, nor suggest that an employee must make an offer. The buyer’s price, financing model and sensitive diligence documents can remain protected, subject to the information actually required by the applicable procedure.
Where the buyer is foreign, the notice should explain the transaction in plain English only if the recipients understand English. A French-language operative notice is usually safer for a French workforce. The English version can help the foreign buyer understand the record, but it should not create a conflict as to the deadline or the company being sold. If the parties provide a bilingual document, identify which version controls and make both versions materially identical. A translation that changes “sale of a majority participation” into “sale of the business” can create a serious ambiguity.
Confidentiality also needs to be planned. If a CSE is involved, its members are subject to professional secrecy for manufacturing processes and a duty of discretion for confidential information presented as such by the employer under Article L. 2315-3 of the Labour Code. The buyer should mark genuinely confidential information and avoid labelling every page confidential without explaining the reason. The CSE process is not a licence to circulate an entire virtual data room. A controlled data-room protocol, a list of approved recipients and a record of questions and answers reduce the chance that a cross-border disclosure becomes a separate confidentiality dispute.
If an employee sends an offer, the seller should time-stamp it and acknowledge receipt without making a premature decision. The offer may be financially unrealistic, incomplete or conditional, but it should still be assessed under the agreed process. The seller should avoid giving the foreign buyer a misleading representation that no employee offer exists until the deadline has expired and the internal mailbox has been checked. If all employees state before the end of the month that they do not intend to make an offer, the parties may be able to close earlier under Article L. 23-10-1. That acceleration should be documented individually or through a legally reliable collective record.
The two-year completion rule creates a second evidence question. If the buyer closes several months after the original notice, the file should connect the closing to the original project. Material changes in the buyer, the sale perimeter, the price mechanism or the control percentage may justify renewed legal advice. A seller should not argue that a notice from an abandoned sale automatically covers a later sale to a different foreign group. The safest practice is to compare the notice, the signed transaction documents and the closing certificate in a short chronology.
The company should also preserve evidence after closing. The commercial register is the Registre national des entreprises (RNE, the national register of businesses) and the RCS is the Registre du commerce et des sociétés (the commercial and companies register). INPI, the Institut national de la propriété industrielle, operates the formalities system used for many business filings. The official French business formalities portal and the INPI business information site explain the administrative route. These portals do not replace the employee evidence pack, but they help the buyer show that the ownership and management changes were filed after the legal closing.
II. How should a foreign buyer structure the closing and the CSE route?
A. What changes when a French company has a CSE or lacks one?
The CSE route is different from the direct employee-offer route. The CSE is a statutory employee representative body that receives information and, in the situations defined by the law, is consulted on the project. The buyer should first establish whether the French employer has crossed the headcount and duration thresholds that trigger a CSE obligation. Article L. 2312-1 of the Labour Code distinguishes the CSE rules for companies with at least 11 employees from the expanded economic, social and employment functions that apply at the higher threshold. The exact workforce calculation, the existence of several establishments and the status of employees must be checked rather than inferred from payroll totals in the data room.
For a company subject to the obligation to establish a CSE with the relevant statutory powers, Article L. 23-10-7 directs the parties to the information-and-consultation route for a project to sell the majority participation. The current Article L. 23-10-7 should be read with the company’s headcount, CSE election records and internal organisation. A CSE consultation is not the same as asking each employee whether they want to purchase the company. The CSE may examine the project, ask questions and issue an opinion under the applicable labour-law timetable, while the individual employee-offer mechanism is designed for companies outside that route.
The distinction is practical for a foreign buyer. If the French target has a functioning CSE with the relevant remit, the transaction calendar must allow the CSE to receive sufficient information, convene according to its rules, ask questions and be consulted before the seller presents closing as complete. If the company is below the relevant threshold, or if the law places the company outside the CSE consultation route, the seller normally works through the direct information procedure described in Article L. 23-10-1. A business with 50 employees but no functioning CSE cannot be treated casually: the reason for the absence, any election failure and the applicable fallback must be documented.
The same decision tree should be applied to an asset sale. For a sale of a fonds de commerce, the Commercial Code provides separate rules for employees and the CSE, including Article L. 141-28. An acquisition agreement that uses “enterprise sale” as a commercial label may actually be a share transfer, a fonds sale, a contribution, a merger or a transfer of selected assets and contracts. Each structure can change the notice and consultation analysis. The foreign buyer should put the exact legal structure in the term sheet and instruct the employment-law reviewer to test that structure.
The CSE process must also be kept separate from ordinary employee relations. Employees may be worried about job security, the buyer’s country, language, remote management, pension arrangements, collective agreements and the continuity of French operations. Those concerns should be addressed through a controlled communication plan. The corporate transaction documents should not promise employment conditions that the buyer has not approved, while the employee information should not hide a planned closure or relocation that is already a material part of the project. A clear separation between legal information, management communication and confidential negotiations helps prevent inconsistent statements.
The foreign buyer should ask for a CSE file during due diligence. The file should include the election protocol, the last election results, the current list of elected members, meeting minutes, the CSE’s internal rules if relevant, previous consultation opinions, open information requests, and any litigation concerning the body. It should also identify whether the company has one CSE or several establishment-level bodies and whether a central CSE is involved. The buyer does not need to treat every question as a deal breaker, but it needs to know which body must receive the information and whether the consultation is complete.
The buyer should also avoid a common sequencing error: signing a binding agreement and only then asking whether the CSE route applies. A signed agreement may contain conditions precedent that preserve a route to consultation, but it may also give employees or the CSE a credible argument that the decision was already made. The legal team should decide whether the transaction is at an exploratory stage, a project subject to consultation, or a signed transaction awaiting closing. The board minutes, announcement plan and sale agreement should use the same stage description.
The CSE’s confidentiality obligations support a controlled process but do not eliminate the need for careful disclosure. The foreign buyer can give the information necessary to understand the ownership change, business plan and employment consequences, while protecting trade secrets and personal data. If the buyer wants to disclose a foreign group chart, financing structure or post-closing reporting lines, it should define the purpose of each document. A clean index showing what was sent, when, to whom and under what confidentiality label is more useful than an unstructured file transfer.
The employee route also interacts with the company’s existing employment obligations. A foreign buyer inherits a French employer with French employment contracts, a collective agreement, payroll records and relationships with URSSAF, the body that collects French social contributions. The sale does not convert those obligations into the buyer’s home-country system. A CSE consultation about the transaction does not replace the consultations required for a later reorganisation, redundancy plan, transfer of working time or change in working conditions. Those future projects require their own legal analysis.
B. What should the foreign buyer put in the sale agreement and closing checklist?
The sale agreement should turn the legal timetable into contractual obligations. The parties should name the responsible seller, the French company contact, the CSE contact if applicable, the person authorised to receive an employee offer, and the person responsible for the formalities after closing. They should attach a schedule showing the notice date, the earliest signing or closing date, the date for any CSE opinion, the deadline for employee offers, the date for registered filings and the expected date for the updated registry extract.
The conditions precedent should address the employee route without making a false promise that the seller controls the result of a consultation. The seller can undertake to deliver the information lawfully, convene the competent body, provide the required records and certify the absence of an unprocessed employee offer at closing. The buyer can require copies of receipts, minutes, opinions, written waivers and the closing certificate. If a CSE consultation remains open, the agreement should say whether signing is permitted, whether closing is prohibited, and what happens if the CSE requests additional information.
Representations and warranties should distinguish factual statements from legal conclusions. Useful factual warranties may cover the current cap table, the absence of undisclosed options, the identity of the legal owner, the existence or absence of a CSE, the completeness of employee records, the delivery of notices and the absence of a prior notice within the preceding twelve months. A warranty stating simply that “all employee consultation requirements have been satisfied” may be too vague for a cross-border buyer. The schedule should identify the source documents so that a dispute does not turn on a translation of one sentence.
The agreement should allocate the risk of a late or defective notice. The buyer may request an indemnity for a civil fine, a procedural claim or the cost of repeating the process. The seller may seek a cap, a basket or a time limit. A negotiated indemnity does not make an invalid process valid against employees or public law. It only allocates financial risk between the contracting parties. The buyer should also check whether the insurance programme covers employment-law representations, and whether an escrow or retention is appropriate for a sale involving a substantial fine exposure.
Authority and signing formalities are especially important when the buyer is incorporated abroad. The seller may need a board resolution, a shareholder approval, a notarised power of attorney or a certified translation. The buyer may need a certificate of incorporation, evidence of signatory authority, an apostille or a legalisation depending on the document and country. These documents are not substitutes for a Kbis. They are the evidence that the foreign entity exists and that the person signing can bind it. The French company’s own corporate approvals should be checked under its SAS or SARL articles.
For an SAS or SASU, the buyer should review any approval clause, pre-emption clause, transfer restriction or change-of-control provision in the articles and shareholders’ agreement. Service Public’s official guide to the transfer of shares in an SAS or SASU sets out the principal stages: informing employees where required, determining the price, checking approval, signing the transfer documents, making the transfer enforceable, registering it and completing the administrative and tax steps. The guide is not a substitute for reviewing the target’s bespoke articles. It is a useful checklist against which the buyer can test the transaction file.
For a SARL or EURL, an entreprise unipersonnelle à responsabilité limitée (a single-member limited-liability company), the buyer should focus on the statutory approval rules for a third-party purchaser, the written transfer instrument, the update of the articles and the registration. Service Public’s official SARL and EURL transfer guide identifies the relevant stages and refers to the same employee-information provisions. A foreign buyer should not assume that a share purchase agreement alone completes a SARL transfer. The company’s articles, the approval decision and the evidence of notification to the company may be needed for the transfer to be effective against the relevant parties.
The buyer should maintain a closing binder with at least the following sections:
- corporate identity: Kbis, RNE registration details, articles, shareholder ledger and beneficial-owner information;
- control evidence: pre-closing and post-closing cap tables, voting rights, options, warrants and any securities giving access to capital;
- employee process: notices, receipts, translations, employee offers, waivers, CSE documents and confidentiality records;
- authority: board resolutions, shareholder decisions, powers of attorney, signatory evidence, certifications and translations;
- transfer documents: share purchase agreement, transfer form or instrument, consideration evidence, share-account records for an SAS, and updated articles for a SARL where required;
- filing record: tax registration, commercial formalities, beneficial-owner update, legal notice where applicable and the new Kbis when issued; and
- post-closing handover: bank mandates, payroll access, accounting access, contracts, insurance, licences and the identity of the new legal representative.
For tax and administrative filings, the buyer should coordinate with the French tax administration rather than rely on the foreign group’s normal process. The professional section of impots.gouv.fr provides access to French tax services and information. The transfer of shares can trigger registration duties and capital-gains issues for the seller, while a transfer of the business assets can produce a different tax profile. The legal closing memo should state which party is responsible for each filing and should record the filing receipt. A bank transfer of the purchase price is not evidence that all French tax formalities have been completed.
The foreign buyer should also verify whether a change in beneficial owners requires an updated declaration. Beneficial owners are the individuals who ultimately own or control the company. A corporate buyer may acquire 70% of a French SAS and change the individual behind the control chain without changing the French company’s capital. The company must examine its beneficial-owner filing and submit the appropriate update through the formalities system. The buyer should not wait for an automatic Kbis update to reveal the change. It should instruct the French representative to check the RNE and the company’s filed information after completion.
Post-closing management changes require the same discipline. If the foreign buyer replaces the president of an SAS or the gérant, meaning the managing director, of a SARL, the decision, acceptance, identity documents and filing must be coordinated. If the new director lives abroad, a French address, tax, social-security and signing analysis may be needed. That is a separate question from the employee-information procedure. Combining all topics in one undifferentiated closing checklist makes it easy to miss a filing or to assume that a foreign director can manage French payroll and banking without additional documentation.
A foreign buyer should link this narrow employee-timing analysis to the broader share-transfer process. The existing French company share-transfer checklist for a foreign buyer covers approval, tax and closing mechanics at a wider level. This article addresses the distinct question that can determine when the parties may sign and close: employee information, the one-month period and the CSE route. Both files should be read together, but the existence of the broader checklist does not remove the need to document the 2026 employee process.
The company should also consider whether the foreign investment itself raises an issue outside the employee process. Certain activities in France may be subject to foreign-investment screening, merger control, regulated-activity approval, sector licensing or national-security review. The buyer should identify those issues during due diligence and put them in the conditions precedent. A CSE opinion or an employee waiver does not replace a regulatory approval. Conversely, a regulatory approval does not repair a defective employee notice. Each route has its own legal owner, deadline and evidence.
A practical closing sequence can therefore be written as follows. First, classify the transaction: majority shares, minority investment, fonds de commerce, merger or asset transfer. Second, check the company’s headcount, CSE status, articles and ownership instruments. Third, determine whether an exclusion applies and whether the 2026 transition rule governs. Fourth, send the operative employee notice or begin the CSE information-and-consultation process using a provable method. Fifth, keep the foreign buyer’s diligence and communication channels consistent with the notice. Sixth, wait for the statutory period or document an earlier lawful waiver where available. Seventh, sign and close only when the agreement’s conditions and the employee route are aligned. Eighth, complete the French tax, RNE, RCS, beneficial-owner and management filings. Ninth, preserve the full evidence pack for the life of the representations and indemnities.
Conclusion
For a foreign buyer, the decisive point is not the nationality of the acquirer. It is the legal structure and timing of the French transaction. A majority share sale in an SAS, SASU or SARL can trigger a direct information process where the company is outside the relevant CSE consultation route. For sales governed by the 2026 reform, the operative minimum is generally one month before the sale, with a maximum civil fine of 0.5% of the sale amount. A company with the relevant CSE must follow the information-and-consultation route instead. A fonds de commerce sale follows separate provisions.
The buyer and seller should identify the legal object, calculate control from the complete securities records, confirm the CSE position, check exclusions, and define the meaning of signing and closing in the agreement. They should then preserve proof of receipt, the exact notice version, translations, corporate authority, employee responses, CSE minutes, waivers and the post-closing French filings. The Kbis, RNE and tax records show administrative completion; they do not replace the employee evidence pack.
The strongest cross-border transaction file is therefore chronological and bilingual where necessary. It tells a reviewer what was sold, who had authority, which body or employee received information, when the period began, why the parties could close, and which filings followed. It also keeps the employee process separate from regulatory approvals, tax duties, management appointments and any later restructuring. That discipline gives a foreign buyer a clearer closing date and gives the French seller a defensible record if the process is later questioned.
Need a quick opinion on your case
If you are selling or acquiring a French company from abroad, a lawyer from the firm can review the transaction timetable, the employee-information route, the CSE documents and the closing conditions. We offer a telephone consultation within 48 hours with a lawyer from the firm.
Call +33 6 46 60 58 22 or use the contact page. The firm advises founders and companies in Paris and Île-de-France as well as international buyers coordinating a French acquisition.
For the broader French company-formation and corporate-law hub, see the French company law and formation page.