Assistance is available to help business buyers. However, the formalities involved in obtaining them are not straightforward.
There are a number of conditions attached to these grants, and knowing exactly which ones you are entitled to requires a great deal of time and attention. Business buyers are the target of several schemes.
In practical terms, a business takeover is the total or partial acquisition of the assets and activities of a company that is being put up for sale.
To help you do this, public bodies have created a series of specific aids dedicated to buyers.
How do you qualify and what conditions must you meet?
ACRE is a public scheme designed toreduce the tax burden on people setting up or taking over a business.
It provides total exemption from social security charges for one year.
As of January 1, 2019, all business start-ups or takeovers are eligible for ACRE without any special conditions.
The buyer must hold more than 50% of the capital (or a minimum of 35% in the case of a family buyout), or be a company director and hold at least one-third of the capital (or 25% if another partner alone does not hold more than half the capital).
Pole Emploi is mobilizing to support business takeovers through ARCE ("Aide à la reprise ou à la création d'entreprise").
It provides financial support for buyers by paying out their unemployment benefit in the form of a lump sum.
45% of the remaining ARE (Allocation d'aide au retour à l'emploi) is paid in advance to help finance the new business.
ARCE is issued to :
- Jobseekers receiving ARE or authorized to receive it when taking over the company.
- People who have been made redundant and are taking steps to start up a new business during their notice period, redeployment leave or mobility leave, and who are receiving ARE.
To obtain it, you must also have previously applied to Pôle Emploi for ACRE.
France's Banque Publique d'Investissement supports companies through its business transfer marketplace, bringing together sellers and buyers throughout the country. BPI France also offers a business transfer development contract in the form of a bank loan top-up of up to €400,000.
These schemes are aimed at a wide range of entrepreneurs, with the viability and solvency of each being examined on a case-by-case basis by BPI France.
The BPI France Capital Transmission investment fund finances company takeover projects.
It is possible to obtain an exemption from income tax, CFE (Cotisation Foncière des Entreprises), and property tax by locating in a ZRR (Zone de Revitalisation Rurale).
Assisted zones also enable the buyer to benefit from tax exemptions of various kinds: companies taken over located in ZFU (Zone franche urbaine) and ZRU (Zone de revitalisation urbaine) benefit from a reduction in registration duty for the takeover of a business, as well as for transfer duties.
The purchase of a company's shares by its employees grouped together in a holding company entitles them to a tax credit calculated on the basis of the previous amount of corporation tax payable by the company.
If a loan was taken out to buy the company, the amount of interest is also taken into account.
Numerous registration deeds (acquisition of company rights, property contributions by employees, etc.) are fully tax-exempt.
In France in 2016, over 60,000 businesses were put up for sale, but half of them disappeared for lack of a buyer.
At the same time, there is a correlation between a region's economic dynamism and the success of business takeovers.
A high rate of company takeovers is indeed a symbol of good health for entrepreneurs and investors alike.
Written by our expert Paul LASBARRERES-CANDAU
July 9, 2018
