Aid is available to help business buyers. However, the formalities to complete to obtain them are not simple.
Granted under many conditions, knowing exactly which ones you are entitled to requires a lot of attention and time. Business buyers are the target of several schemes.
In concrete terms, a business takeover refers to the total or partial acquisition of the assets and activities of a company put up for sale.
To help you, public organizations have created a series of specific aids dedicated to buyers.
How to qualify and what are the conditions to be met?
ACRE is a government scheme that reduces the tax burden on business creators or buyers.
It allows you to benefit from a full exemption from social security contributions for one year.
Since January 1, 2019, all business creators or buyers can benefit from ACRE without any specific conditions.
The buyer must hold more than 50% of the capital (or a minimum of 35% in the case of a family business transfer), or be a company director and hold at least one-third of the capital (or 25% if another shareholder does not hold more than half of the capital alone).
Pole Emploi (French employment center) is committed to supporting business start-ups through ARCE ("Assistance for Business Start-up or Takeover").
It helps support business buyers financially by paying their unemployment benefits as a lump sum.
4. 45% of the remaining ARE (Unemployment Benefit Allowance) is paid in advance to help finance the new business.
The ARCE is granted to:
- Job seekers receiving ARE or authorized to receive it when taking over the company.
- This applies to laid-off individuals who start the process of taking over a company during their notice period, reclassification leave, mobility leave, and who are receiving unemployment benefits (ARE).
To get it, you must also have previously applied for ACRE (Aid to Company Creators and Buyers) from Pôle Emploi (French employment center).
The French Public Investment Bank supports companies through its business transfer marketplace, connecting business sellers and buyers throughout the country. BPI France also offers a development transfer contract in the form of a bank loan supplement, the amount of which can be up to €400,000.
These schemes are aimed at many entrepreneurs, with BPI France services studying the viability and solvency of each on a case-by-case basis.
The BPI France Capital Transmission investment fund helps finance business takeover projects.
You can get an exemption from tax on profits, CFE (Corporate Property Contribution), and property tax by setting up in a ZRR (Rural revitalization zone).
Assisted areas also allow the buyer to benefit from tax exemptions of various kinds: acquired companies located in ZFU (Urban Free Zone) and in ZRU (Urban Revitalization Zone) benefit from a reduction in registration fees for the transfer of a business as well as for transfer duties.
When employees grouped into a holding company buy back shares in their company, they can get a tax credit based on the company's previous corporation tax bill.
If a loan was taken out to buy the company, the amount of interest is also taken into account.
Many registration deeds (acquisition of social rights, statements of contributions of real estate by employees, etc.) are fully exempt from taxation.
In France, in 2016, more than 60,000 companies were put up for sale, but half of them disappeared due to a lack of buyers.
At the same time, we're seeing a correlation between the economic dynamism of a region and the success of business buyers.
A high rate of business transfers is indeed a sign of good health for business leaders and investors.
Written by our expert Paul LASBARRERES-CANDAU
July 9, 2018
