Buying shares in a French company is often faster than incorporating a new subsidiary, but it is not a simple private contract between a seller and a foreign buyer. The buyer inherits a legal entity with its history, contracts, tax position, employees, bank relationships and reporting obligations. The transaction must therefore be designed around the company\u2019s legal form, its articles of association, the shareholders\u2019 agreement, the approval process and the French registration rules that apply after signing.<\/p>\n
This guide focuses on a foreign founder, group or investment vehicle acquiring shares in a French SAS<\/em> (simplified joint-stock company) or SARL<\/em> (private limited liability company). It explains the difference between an action<\/em> in an SAS and a part sociale<\/em> in an SARL, the documents a non-French buyer should prepare, the tax on the transfer and the closing steps that make the acquisition effective. A Kbis<\/em> is the official extract showing a company\u2019s registration details; it is evidence of the registered information, not a substitute for due diligence.<\/p>\n The practical objective is a clean closing: the buyer knows what is being acquired, the required approval has been obtained, the price is documented, the transfer is recorded, the tax filing is made within time and the company\u2019s registers and beneficial-owner information are updated. The analysis below concerns the acquisition of a French company. An individual moving to France or a purchase of French real estate requires a different legal review. For the wider corporate-formation framework, see the firm\u2019s French company formation and corporate-law hub<\/a>.<\/p>\n The first question is not whether a foreign person is allowed to buy French shares in the abstract. The first question is what the target\u2019s constitutional documents permit. A share transfer changes ownership of the company, while an asset purchase transfers selected assets and liabilities. With a share purchase, the legal entity normally keeps its contracts, licences, tax history, employment relationships and debts. That continuity can be commercially valuable, but it also means that the buyer must investigate liabilities that may not appear in the current balance sheet.<\/p>\n For an SAS, the articles of association are the starting point. They may contain an inalienability clause, a pre-emption right, an approval clause, a change-of-control mechanism or a procedure for notifying the company and the other shareholders. Commercial Code article L. 227-13<\/a> states: Commercial Code article L. 227-14<\/a> provides: The distinction between a freely agreed transfer and an exclusion is important. In its commercial chamber decisions of 21 June 2023, appeal numbers 21-25.952 and 22-12.045, the Court of Cassation examined the scope of article L. 227-15. The official decision explains that the statutory nullity rule concerns a freely consented transfer made contrary to a statutory clause; it does not automatically govern every forced transfer or exclusion mechanism. The decision is available on Legifrance, Commercial Chamber, 21 June 2023, appeal numbers 21-25.952 and 22-12.045<\/a>, and on the official Court of Cassation decision page<\/a>. A buyer should not rely on that distinction to ignore an approval clause: the legal classification of the proposed transfer must be made before signing.<\/p>\n An SAS may also have a shareholders\u2019 agreement. Unlike the articles, a shareholders\u2019 agreement is usually a private contract between its signatories. It can regulate pre-emption, confidentiality, non-compete obligations, exit rights, voting or a right of first offer. The buyer must establish whether the buyer will sign the agreement at closing and whether the seller\u2019s breach creates damages, an indemnity claim or a right to block completion. The company\u2019s share register, securities movement register and cap table must be reconciled with both the articles and the agreement.<\/p>\n For a SARL, the asset being transferred is a share interest, called a part sociale<\/em>, rather than an SAS action. Article L. 223-14 of the Commercial Code contains a specific approval system when shares are sold to a third party. The proposed transfer must be notified to the company and shareholders, and a refusal triggers a statutory mechanism under which the shares may have to be acquired or the seller may be able to proceed after the statutory period. The exact majority, notice and valuation rules should be checked against the current text of Commercial Code article L. 223-14 on Legifrance<\/a>. A buyer who is not already a shareholder should assume that approval is a key condition until the company\u2019s counsel confirms otherwise.<\/p>\n A target organised as an SA, or public limited company, follows a different regime. For an unlisted company, article L. 228-23 of the Commercial Code states that a transfer may be subject to company approval by a statutory clause and that a transfer contrary to such a clause is null. The provision states: Foreign ownership can also raise a separate regulatory question. Certain strategic or regulated activities may require a French foreign-investment control filing or clearance, and some sectors have professional or licensing conditions. The buyer should screen the target\u2019s business, ultimate ownership, technology, defence or critical-infrastructure exposure and public contracts before treating the transaction as unconditional. This review is separate from shareholder approval. A company may approve a buyer under its articles while a regulatory clearance remains outstanding.<\/p>\n A foreign buyer should build a document room before negotiating a final completion date. The seller should provide the articles of association, amendments, shareholders\u2019 agreement, current cap table, share certificates if any, securities movement register, minutes approving previous issuances, capital increase documents, loan agreements, pledges and any option or convertible instrument. The buyer should compare those documents with the RCS, the French Trade and Companies Register, and the RNE, the National Business Register. The Kbis is useful for the current registered name, corporate form, registered office, directors and registration number, but it cannot prove that the cap table is accurate or that no private transfer restriction exists.<\/p>\n The buyer\u2019s corporate file normally includes a certificate of incorporation or registry extract for the foreign purchaser, constitutional documents, a board or shareholder resolution authorising the acquisition, evidence of the signatory\u2019s authority, identification documents for the signatories and information on the ultimate beneficial owner. The ultimate beneficial owner, often abbreviated UBO<\/em>, is the individual who ultimately owns or controls the purchasing entity. French banks, notaries, corporate service providers and the company\u2019s legal advisers may ask for a chain-of-ownership chart, proof of address, source-of-funds information and certified translations. A registry extract may need to be recent, and the applicable country may require an apostille or legalisation. Those formalities depend on the document\u2019s origin and intended use, so they should be confirmed early.<\/p>\n The seller\u2019s file should include proof of title, identity and authority, tax information, evidence that any pledge has been released and consent from any spouse, co-owner or financing party where relevant. If the seller is a company, the buyer should obtain the seller\u2019s corporate approval and check its power to dispose of the shares. If the shares are held through a nominee, trust or foreign holding company, the legal title and beneficial ownership must be mapped before the approval vote. The transaction should not be allowed to reach signing with an unexplained gap between the French company\u2019s cap table and the seller\u2019s ownership evidence.<\/p>\n Approval mechanics deserve a standalone closing checklist. It should identify the person or body that grants approval, the notice format, the documents to attach, the voting threshold, the excluded voters if any, the deadline for a response and the evidence to retain. For an SAS, this may be a shareholders\u2019 decision, a decision by the competent corporate body or another mechanism in the articles. For a SARL, the statutory notice and majority rules in article L. 223-14 are central. The buyer should obtain signed minutes, the attendance or representation list, voting results and any waiver of pre-emption. A short email saying \u201capproved\u201d is rarely a sufficient substitute for the company\u2019s required corporate record.<\/p>\n The parties should distinguish signing from completion. At signing, they agree the price, representations, warranties, conditions precedent and target completion date. At completion, the approval has been obtained, funds are released, the transfer document is signed, the company records the change and the parties deliver the closing documents. A foreign buyer may need a power of attorney because its director will not attend in France. The power should describe the transaction, the authority granted, the ability to sign the share purchase agreement and the ability to receive or deliver corporate notices. If the power is executed abroad, translation, notarisation, apostille or legalisation should be addressed before the signing appointment.<\/p>\n Due diligence should be risk-based rather than limited to formal corporate documents. The buyer should review value-added tax (VAT) filings, corporate-tax notices, unpaid social contributions, customer concentration, key supplier contracts, leases, intellectual-property ownership, employment contracts, disputes, insurance, data protection, sanctions screening and change-of-control provisions. URSSAF<\/em> is the French network that collects social-security contributions; arrears or an incorrect employment classification can become a liability of the acquired company. The buyer should also ask for the company\u2019s annual accounts, management accounts, bank statements, debt schedule and correspondence with its SIE<\/em>, the business tax office.<\/p>\n The acquisition agreement should convert the due-diligence findings into protections. Typical provisions cover title to the shares, absence of pledges, accuracy of accounts, tax liabilities, employment claims, litigation, intellectual property, compliance, undisclosed liabilities and the period before completion. A guarantee of assets and liabilities, commonly called a GAP<\/em> in French practice, should state the covered loss, claim procedure, thresholds, caps, time limits, conduct of litigation and security for payment. A foreign buyer should consider whether the seller or its parent remains creditworthy after completion and whether an escrow, bank guarantee, retention or insurance is needed.<\/p>\n The transfer of unlisted SAS shares also requires attention to how ownership is recorded. Article L. 228-1 of the Commercial Code provides that securities are registered in an account and that, for an unlisted transfer, ownership results from entry in the buyer\u2019s account. The current text is available at Commercial Code article L. 228-1 on Legifrance<\/a>. The contract, the payment evidence, the securities movement register and the buyer\u2019s account entry should all tell the same story. A buyer should ask who will make the entry, on what date and with what supporting documents.<\/p>\n The price should be determinable from the transaction documents. Article 1591 of the French Civil Code states: If the parties cannot agree on a valuation in a situation covered by the law or the articles, article 1843-4 of the Civil Code provides an expert-valuation mechanism. The official provision is Civil Code article 1843-4 on Legifrance<\/a>. It is particularly relevant when a SARL approval refusal leads to a statutory acquisition or when a transfer or buyout formula refers to an expert. The parties should not assume that the expert will simply validate the seller\u2019s spreadsheet: the applicable statutory and contractual valuation rules, the valuation date and the expert\u2019s mandate matter.<\/p>\n Registration duty is separate from the seller\u2019s capital-gains tax. Article 635 of the French General Tax Code requires specified acts and transactions to be registered within the statutory period and expressly covers transfers of shares and transfers of interests in companies whose capital is not divided into shares. See General Tax Code article 635 on Legifrance<\/a>. The French administration\u2019s Service-Public guidance on share disposals<\/a> also describes the deed, registration and securities-account steps. For many share transfers, the filing deadline is one month. The parties should determine who will file, which tax office receives the filing, whether the deed is French or foreign, and which supporting documents must accompany it. Contractual allocation of the cost does not remove the statutory filing obligation.<\/p>\n Article 726 of the General Tax Code sets the principal rates. For shares in a non-listed company whose capital is divided into shares, the rate is generally 0.1%, subject to the statutory real-estate exception. For interests in a company whose capital is not divided into shares, the rate is generally 3% after the applicable proportional abatement. A transfer of interests in a legal person whose assets are predominantly real estate may be subject to a 5% rate. The current text and exceptions should be checked at General Tax Code article 726 on Legifrance<\/a> on the date of completion. The difference between SAS actions and SARL parts can therefore have a direct impact on the cash needed at closing.<\/p>\n The 3% calculation for interests in a company whose capital is not divided into shares must be modelled rather than described as a flat percentage. The \u20ac23,000 abatement is applied in proportion to the number of interests transferred compared with the total number of interests in the company, under the statutory formula. The 5% real-estate rate can be triggered by the target\u2019s asset composition even if the buyer is a foreign company. A French company owning a building or a property-rich portfolio needs a separate review of its balance sheet, valuation and the statutory definition of a predominantly real-estate entity.<\/p>\n The buyer is often the party that handles registration in practice, but the share purchase agreement should state the allocation expressly. The parties should retain the signed deed, payment evidence, tax receipt, valuation support and any certificate issued by the tax administration. Where the transfer is signed abroad, the French tax analysis does not disappear. The tax treatment can depend on the French company\u2019s seat, the type of security, the target\u2019s assets, the residence of the seller and the existence of a tax treaty. An overseas seller may also have a French reporting or capital-gains obligation, while a corporate seller may need to analyse participation-exemption or domestic rules in its own country.<\/p>\n A foreign buyer normally does not become taxable merely because it acquires shares, but the acquisition may change the group\u2019s permanent-establishment, transfer-pricing, withholding-tax or controlled-company analysis. If the buyer will finance the acquisition with a loan from its parent, the interest terms, security, thin-capitalisation limits and arm\u2019s-length evidence deserve a separate review. If the seller is non-resident, the parties should read the current guidance from the French tax administration, including its page on a non-resident declaring a transfer of company interests: impots.gouv.fr guidance for non-residents<\/a>. Tax residence and treaty analysis must be confirmed for the actual parties; a general article cannot select the correct filing for every country.<\/p>\n Price and tax are also linked through the risk allocation. A very low price may require commercial justification, especially where the company has valuable assets, related-party arrangements or a pending sale. An earn-out may create later questions about the tax point, payment evidence and the value assigned to the shares at completion. A debt-free, cash-free adjustment can affect the amount paid without changing the headline enterprise value. The agreement should say which amount is the share price, which amount is repayment of shareholder debt and which amount is a reimbursement of expenses. That clarity helps the buyer\u2019s bank, the tax office and the parties\u2019 accountants apply the same analysis.<\/p>\n A reliable closing uses a signed funds-flow and deliverables schedule. Before the closing call, the parties should confirm the approval resolution, executed share purchase agreement, powers of attorney, payment instructions, release of security, tax form, translated corporate documents and any regulatory clearance. The buyer\u2019s bank may request the acquisition agreement, ownership chart, source-of-funds evidence and KYC documents. KYC<\/em> means \u201cknow your customer\u201d, the identity and anti-money-laundering checks performed by a bank or professional. A delay in the bank\u2019s onboarding can postpone completion even when the corporate approval is complete.<\/p>\n At completion, the parties should follow the agreed sequence. One common sequence is: confirm all conditions precedent; sign the transfer deed and any accession to the shareholders\u2019 agreement; release the purchase price against delivery of the closing documents; record the transfer in the relevant securities or company records; deliver the tax-registration package; and send the post-closing instructions to the company\u2019s accountant and registered-office provider. The sequence can differ when an escrow, deferred payment or simultaneous release of a pledge is involved. The completion memorandum should identify the exact time and date at which control passes.<\/p>\n For an SAS, the company should update the securities movement register and the relevant securities accounts. The entry date matters because it supports the buyer\u2019s title under article L. 228-1. The company should retain the transfer instrument, approval evidence, payment evidence and any waiver. If the buyer receives control, the company should also review its articles, shareholder lists, signature authorities, bank mandates and internal delegations. The new shareholder may need to appoint a director or change the president, but that is a separate corporate decision and should not be assumed to follow automatically from the transfer.<\/p>\n For an SARL, the transfer of parts sociales should be reflected in the company\u2019s documents and, where necessary, the articles should be amended. The buyer should confirm the notification and approval record required by article L. 223-14, the transfer instrument and the evidence that the seller has delivered title. A transfer that changes the manager, registered office, business activity or other registered information may require a filing through the French one-stop portal, called the Guichet unique<\/em>, operated through the INPI, the French National Institute of Industrial Property. The INPI\u2019s official description of the Guichet unique and RNE<\/a> explains the centralised filing route. The filing route and supporting documents depend on the corporate change, so the company\u2019s formalities provider should produce a filing list rather than reusing an old template.<\/p>\n The RCS and RNE records should be checked after completion. The RCS is the Trade and Companies Register; the RNE is the National Business Register that centralises business registration data. The Kbis should be downloaded after any filing to confirm the registered company name, form, address and management information. The BODACC, the Bulletin of Civil and Commercial Announcements, may publish certain corporate notices. These public records are useful checks, but they do not replace the private securities movement register, the company\u2019s accounting records or the beneficial-owner declaration.<\/p>\n Beneficial-owner information should be reviewed when the buyer acquires control or changes the ownership chain. The company must determine whether the individuals who ultimately own or control it have changed and whether a filing or update is required. This is especially important when the buyer is a holding company, fund, trust-like arrangement or multi-tier group. The buyer should prepare a simple chart showing each entity and each individual control point, keep the underlying registry evidence and give the French formalities provider the same names and percentages used in the bank\u2019s KYC file.<\/p>\n Corporate governance should be reset after completion. The buyer should obtain new bank mandates, review the registered office agreement, update the company\u2019s accounting and tax contacts, confirm insurance and delegated authorities, and decide whether the existing accountant, payroll provider and legal advisers remain appropriate. If the company employs staff, the new owner should verify that payroll, social-security filings and employment records continue without interruption. If it will hire the first French employee after completion, the employer must plan the employment contract, the pre-hire declaration and the URSSAF process; the share transfer itself does not replace those employment formalities.<\/p>\n The buyer should also map every contract that contains a change-of-control or prior-consent clause. A share transfer may leave the contracting company unchanged, but a contract can define a change in ownership as a trigger. The same applies to bank facilities, leases, franchise agreements, public procurement, software licences and distribution arrangements. Written confirmation should be obtained where consent is required. If a key contract could be terminated after closing, the issue belongs in the conditions precedent or in a specific warranty and indemnity, not in an informal post-closing task list.<\/p>\n Three Court of Cassation references are particularly useful when reviewing a disputed approval mechanism. In a 15 March 2023 commercial chamber decision, appeal numbers 21-15.393 and 21-15.808, the Court considered the scope of an approval clause and the interpretation of older articles in light of the statutory regime. The official text is available at Legifrance, Commercial Chamber, 15 March 2023, appeal numbers 21-15.393 and 21-15.808<\/a>, with the official Court of Cassation publication<\/a>. In a 17 January 2012 decision, appeal number 09-17.212, the Court addressed the requirement that approval be clear and unconditional where an approval clause applies; see the official Court of Cassation decision page<\/a>. These decisions do not answer the target company\u2019s question without reading its articles, but they show why an ambiguous approval email should not be treated as a completed legal formality.<\/p>\n The final closing file should be assembled as if a bank, tax auditor or future buyer may review it. It should contain the signed agreement and schedules, approvals, waivers, title evidence, corporate authorities, translated documents, tax receipt, funds-flow, securities-register entry, updated cap table, post-closing Kbis, beneficial-owner evidence, regulatory clearances and a note explaining any deferred item. A practical completion checklist is:<\/p>\n The last item is deliberately evidence-based. A foreign buyer should ask for the filing receipt, the updated extract, the register entry and the bank confirmation rather than relying on a promise that the filing \u201chas been handled\u201d. If a filing is rejected, the company should keep the rejection notice, correct the document and resubmit it promptly. The legal and commercial consequences of an incomplete closing can be disproportionate to the cost of a careful file review.<\/p>\n A foreign buyer can acquire shares in a French SAS or SARL, but the transaction should be managed as a corporate closing rather than as a translated signature page. The articles and shareholders\u2019 agreement determine whether approval, pre-emption or another restriction applies. The buyer must identify the difference between SAS actions and SARL parts, review the company\u2019s liabilities and ensure that foreign corporate documents, beneficial-owner information and powers of attorney are acceptable for the French process.<\/p>\n Price, valuation and registration duty must be separated from the seller\u2019s capital-gains analysis. The 0.1% regime commonly associated with shares in an SAS, the 3% regime for many SARL interests and the 5% real-estate-entity regime can lead to materially different closing budgets. The exact result depends on the security, the target\u2019s assets and the parties\u2019 tax residence. After signing, the transfer must be recorded, the tax filing completed, corporate and public records updated where required and the buyer\u2019s control arrangements documented.<\/p>\n Before fixing a completion date, a foreign buyer should have one coordinated checklist covering approval, title, regulatory clearance, tax registration, funds, registers, beneficial ownership and post-closing governance. That approach protects the buyer\u2019s ownership evidence and gives the French company a defensible record of how the change of control occurred.<\/p>\n Need a quick opinion on your case<\/strong><\/p>\n You can arrange a telephone consultation within 48 hours with a lawyer from the firm to review your French share-transfer project, approval issue or cross-border closing timetable.<\/p>\n Call +33 6 46 60 58 22<\/a> (Ma\u00eetre Reda Kohen), or use the contact form for kohenavocats.fr<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" A practical guide for foreign buyers acquiring French SAS or SARL shares: approval clauses, valuation, tax, documents, registers and post-closing filings.<\/p>\n","protected":false},"author":251031309,"featured_media":16486,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80314,80313],"tags":[],"class_list":["post-2101155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nI. How can a foreign buyer acquire shares in a French company?<\/h2>\n
A. Which company form and transfer restrictions apply?<\/h3>\n
Les statuts de la soci\u00e9t\u00e9 peuvent pr\u00e9voir l’inali\u00e9nabilit\u00e9 des actions pour une dur\u00e9e n’exc\u00e9dant pas dix ans.<\/q> In other words, an SAS may restrict the sale of its shares for a period of up to ten years when the statutory conditions are met. A buyer should request the original articles and every amendment, not only the latest Kbis, because the Kbis does not reproduce all transfer restrictions.<\/p>\n
Les statuts peuvent soumettre toute cession d’actions \u00e0 l’agr\u00e9ment pr\u00e9alable de la soci\u00e9t\u00e9.<\/q> The French word agr\u00e9ment<\/em> means prior approval. The approval body, quorum, notice period, voting threshold and consequences of a refusal must be read in the actual articles. A transaction signed before that approval may create a serious closing problem even where the seller and buyer have agreed on the price. Commercial Code article L. 227-15<\/a> adds:
Toute cession effectu\u00e9e en violation des clauses statutaires est nulle.<\/q> That is why the share purchase agreement should normally make statutory approval a condition precedent, unless the legal and contractual analysis confirms that approval is unnecessary.<\/p>\n
La cession d’actions ou de valeurs mobili\u00e8res donnant acc\u00e8s au capital, \u00e0 quelque titre que ce soit, peut \u00eatre soumise \u00e0 l’agr\u00e9ment de la soci\u00e9t\u00e9 par une clause des statuts.<\/q> The full rule is available in Commercial Code article L. 228-23<\/a>. This article is not a substitute for reviewing an SA\u2019s securities and corporate-law rules, but it illustrates why the legal form must be identified before a term sheet is signed.<\/p>\n
B. Which documents and approvals should be prepared before signing?<\/h3>\n
II. What tax and closing formalities must be completed?<\/h2>\n
A. How are the price, registration duties and cross-border tax handled?<\/h3>\n
Le prix de la vente doit \u00eatre d\u00e9termin\u00e9 et d\u00e9sign\u00e9 par les parties.<\/q> The official text is available at Civil Code article 1591 on Legifrance<\/a>. A fixed price is not the only possible structure. The parties may use a completion-accounts adjustment, locked-box mechanism, earn-out or deferred consideration, but the formula, accounting principles, dispute process and payment dates should be precise enough to avoid a later disagreement about what the buyer purchased.<\/p>\n
B. How do you complete the closing, registers and post-closing filings?<\/h3>\n
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Conclusion<\/h2>\n