Business Acquisition and Sale Lawyer in Paris

A company sale is rarely decided on signing day. It is decided in the due diligence that precedes it, in the drafting of the seller’s representations and in the mechanics of the warranty that will apply for three to five years. The firm acts on acquisitions and disposals of French SMEs and mid-sized companies, in France and in a cross-border context, for the seller or for the buyer.

The objective is simple: the price paid should match what is bought, and the warranty should be enforceable if it does not.

The risk: paying for a liability you did not see, or warranting what you did not disclose

For the buyer, the risk lies in the gap between the company described in the documentation and the real company: a pending tax or social security audit, a key customer contract terminable at the first alert, a latent employment claim, a change of control clause in a lease or a loan. Without targeted due diligence and precise seller representations, these liabilities remain with the buyer.

For the seller, the risk is symmetrical: a warranty with no cap, no basket and no time limit exposes him for years to claims on facts he did not control. Article 1112-1 of the French Civil Code also imposes a pre-contractual duty of information whose breach may found an action for nullity or damages, independently of the contractual warranty.

The legal solution: documentation that allocates risks before they materialise

The security of the transaction rests on three documents. The letter of intent fixes the scope, the price and exclusivity, and states what is binding and what is not. The sale agreement organises the transfer, the conditions precedent and the price adjustments. The warranty and indemnity agreement describes the company at closing and determines who bears the differences: cap, basket, duration, claims procedure and security for the warranty.

In a post-closing dispute, several grounds combine: enforcement of the contractual warranty, fraud or mistake as to essential qualities (Articles 1130 et seq. of the Civil Code), breach of the duty of information. The choice depends on time limits, available evidence and the remedy sought, price reduction or rescission.

How the firm assists you

Before closing, the firm conducts or coordinates the legal due diligence, drafts or reviews the letter of intent and the sale agreement, and negotiates the warranty according to its client’s position. It works alongside the accountants and, where the target or the buyer is located abroad, with foreign counsel.

After closing, it notifies or contests warranty claims, negotiates their settlement and, if necessary, brings the matter before the French commercial court or the arbitral tribunal provided for in the agreement. Questions of nullity of corporate decisions taken in connection with the transaction are handled in light of the 2026 reform of nullities in French company law.

Typical matters

The situations below are illustrative scenarios drawn from the firm’s practice and anonymised.

Tax liability revealed six months after closing

The buyer of a services company receives a tax reassessment covering pre-closing years. The firm notifies the claim within the contractual deadline, documents the loss and obtains coverage of the reassessment under the warranty.

Earn-out refused by the buyer

A seller disputes the earn-out calculation based on first-year EBITDA after the buyer changed the scope of the business. The firm obtains the appointment of an independent expert under the contractual procedure and payment of the balance.

Foreign group acquiring a French target

A European buyer acquires a French industrial SME. The firm adapts the documentation to French law requirements, confirms that no foreign investment screening applies and secures the warranty with an escrow.

Two matters are inseparable from an acquisition. The relationship between the buyer and any remaining partners, which is where shareholder disputes begin, and the premises, since the transfer of the business usually carries the transfer of the commercial lease with it.

Frequently Asked Questions

Share deal or asset deal?

A share purchase transfers the company with its liabilities and its history, and it is the usual structure in France because it preserves contracts, licences and employment relationships. An asset purchase transfers a defined perimeter, which is attractive where the past is a concern, but it triggers specific rules: a going concern carries its employment contracts with it, certain leases and licences require consent, and the price is subject to particular publicity and creditor protection formalities. The tax outcome usually decides between the two, and it is modelled before the letter of intent is signed.

What does due diligence cover in France?

Corporate records and title to the shares, accounts and off balance sheet commitments, customer and supplier contracts including change of control clauses, employment matters and collective agreements, real estate and leases, intellectual property, litigation, tax and social security, permits and environmental matters, data protection and, where relevant, export control and sanctions exposure. Vendor due diligence is increasingly common in auction processes. The purpose is not exhaustiveness but identifying what will change the price, the warranties or the decision itself.

What protection does a warranty package give?

Warranties describe the company as at signing, and the indemnity obliges the seller to compensate for liabilities whose origin predates the sale. Its practical value depends on the cap, the floor and the individual threshold, the duration for each category, the exclusions, and the security given, whether escrow, bank guarantee or warranty insurance. A package without security is worth what the seller is worth on the day of the claim. The notification mechanism matters as much as the substance, because claims are frequently lost on the form and the deadline.

Which employee steps are mandatory before a sale?

In companies below the statutory size thresholds, employees must be informed in advance of a proposed sale of the business or of a controlling interest so that they have the opportunity to make an offer. Where a social and economic committee exists, it must be informed and consulted before the decision is taken. These steps have their own timetable, cannot be waived between buyer and seller, and a failure exposes the transaction. They are scheduled at the outset rather than discovered shortly before signing.

How is the price paid and secured?

Commonly by payment at closing with part of the price held in escrow, sometimes with a deferred element and an earn out linked to defined and measurable results. An earn out clause needs an unambiguous calculation method and rules on how the business will be run during the period, failing which it generates the next dispute. Where the price depends on completion accounts, the mechanism and the expert appointed to settle disagreement are set out precisely. Security for the price and security for the warranties are separate questions.

Which authorisations may be required?

Merger control where the turnover thresholds are met, foreign investment screening where a foreign investor acquires a target in a sensitive sector, and sectoral authorisations in regulated activities. Landlord consent, contractual change of control consents and, occasionally, a pre-emption right in favour of a public body also have to be checked. Each carries a timetable of its own, so the closing date is built backwards from the longest of them rather than from the commercial calendar.