Sale of a Business (Fonds de Commerce): 10 Mistakes to Avoid in 2026

Have you decided to sell your business (fonds de commerce) after years of hard work? This crucial stage in your career as an entrepreneur deserves careful preparation. Unfortunately, many sellers make mistakes that can prove costly, both financially and legally. From undervaluing the sale price to failing to inform creditors and neglecting contractual points, there are many pitfalls in the sale of a business.

In a constantly changing economic environment, mastering the legal and practical aspects of this transaction is essential to secure the sale and optimise your proceeds. Let us look at the main mistakes to avoid in order to sell your business with peace of mind. Another approach to these pitfalls, from the valuation of the business to administrative authorisations, appears in our article on the mistakes to avoid when selling a business (fonds de commerce).

The valuation mistake: underestimating the real value of your business

The consequences of a poor valuation

One of the costliest mistakes is setting a sale price that is too low through a lack of knowledge of valuation methods. A business (fonds de commerce) comprises intangible assets (customer base, goodwill, leasehold right) and tangible assets (equipment, furniture, stock), the valuation of which requires precise expertise.

An undervaluation can cost you tens of thousands of euros, particularly at a time when commercial property and digital assets are increasingly valuable. Conversely, an overvaluation may deter potential buyers and needlessly prolong the time the business is on the market.

The valuation methods to master

To avoid this mistake, several approaches are available:

• The turnover method: it applies a sector scale (as a percentage of average turnover including VAT over the last three financial years) specific to each activity – for example, 40 to 100% of turnover for a restaurant, 50 to 120% for a retail business
• The EBITDA method (EBE, gross operating surplus): more reliable, it values the business by applying a multiple to adjusted EBITDA (generally between 3 and 7 times), which reflects the actual profitability of the operation
• The comparison method: it relies on sale prices observed for similar businesses in the same sector and the same geographical area, through notarial databases or business transfer networks
• The asset-based method: it adds up the net value of each element of the business (leasehold right, equipment, stock, valued customer base), and is useful as a complement to the other approaches
• Taking digital assets into account: website, search engine optimisation, customer file, social networks, online reviews – these elements represent a growing value in 2026 that should be included in the estimate

Do not hesitate to call on a chartered accountant or a professional valuer to obtain a reliable and reasoned estimate of your business. The valuation methods and the disputes over price they give rise to are detailed in our article on the valuation of a business (fonds de commerce).

Failure to publish the legal notices: an often neglected obligation

The mandatory publicity formalities

The sale of a business must comply with strict publicity formalities designed to protect creditors. The French Commercial Code requires a notice of sale to be published in a legal announcements newspaper in the département where the business is operated, within 15 days of signature of the deed.

This publication must contain specific particulars: date of the deed, surnames, first names and addresses of the former and new owner, nature and location of the business, stated price, opposition period and choice of address for service within the jurisdiction of the court. These particulars are required on pain of nullity of the publication (Article L. 141-13 of the French Commercial Code); a buyer who pays without a valid publication is not discharged as against third parties.

The risks of failing to comply with these formalities

Failure to publish exposes the seller to several major risks:

• The payment cannot be relied on against creditors: a buyer who pays the price without having carried out the required publications, or before the ten-day opposition period has expired, is not discharged as against third parties (Article L. 141-17 of the French Commercial Code); exposed to paying a second time, the buyer will seek recourse against the seller
• The impossibility of releasing the escrow: without a valid publication, the creditors' opposition period does not run, which blocks indefinitely the release of the deposited sale price
• Your personal liability: where a creditor who was not informed suffers loss, you may be required to compensate that creditor, even beyond the sale price
• Continuing tax joint liability: the tax authorities may claim payment of your tax debts from the buyer, which gives rise to indemnity proceedings against you
• The risk of criminal proceedings: in the most serious cases, failure to publish combined with concealment of liabilities may be characterised as fraudulent organisation of insolvency

These consequences can permanently ruin a transaction that was well negotiated at the outset.

Carelessness in drafting the sale deed

The essential clauses too often forgotten

The deed of sale of a business must be drafted with the greatest care. Certain clauses, although essential, are frequently neglected by inexperienced sellers:

The warranty against eviction protects the buyer against disturbance of enjoyment. Without this clause, the seller could be criticised for not having guaranteed peaceful enjoyment of the business.

The non-competition clause limits the seller's ability to carry on a similar activity within a defined geographical area. It must be limited in time, in space and in its purpose in order to be valid.

The warranty against latent defects binds the seller as to the actual condition of the business sold. The extent of this warranty should be precisely defined.

The importance of detail in the inventory

The inventory of the items sold must be exhaustive and precise. An approximate description may give rise to later disputes over what was actually included in the sale. Remember to list:

• Equipment and plant: with the make, model, year of acquisition, state of wear and residual value of each item
• Intangible assets: customer base, shop sign, trade name, domain name, professional e-mail addresses, social media accounts, patents, registered trade marks and licences
• Stock of goods: detailed inventory, quantities, unit purchase price – ideally checked jointly by both parties on the day of the sale
• Contracts transferred: supplier contracts, maintenance contracts, software subscriptions, equipment rental contracts, current advertising contracts
• Items excluded from the sale: state explicitly what is not being sold (personal vehicle used in the business, prior receivables, cash, items for private use)
• Administrative and accounting documents handed over: customer file, database, accounting history, ongoing files, internal procedure manuals

Poor management of liabilities and creditors

The obligation to inform creditors

The law protects the seller's creditors by granting them a right of opposition over the sale price. This protection requires the seller to comply scrupulously with the time limits and forms of notification.

Creditors have 10 days from the last of the publications to lodge an opposition. During that period, the buyer cannot pay the sale price, unless it is deposited with a notary. The operation of the escrow and the asset and liability warranty given by the seller are explained in our article on the escrow of the sale price of the business.

The consequences of poor management of liabilities

Several common mistakes can jeopardise the sale of a business:

• Concealing or understating debts: unpaid suppliers, arrears of social security contributions, undeclared tax debts – any concealment exposes the seller to an action to annul the sale for fraud (dol) and to criminal proceedings
• Failing to settle tax and social security debts before the sale: the buyer may be held jointly liable with the seller for income tax on the profits of the year of the sale, up to the price of the business and for a period of ninety days (Article 1684 of the French General Tax Code (CGI)), which may block the release of the escrow and give rise to a dispute
• Neglecting registered creditors: holders of pledges or preferential rights over the business have a right to follow the asset – they may seize the business in the hands of the buyer if their claims have not been discharged
• Ignoring off-balance-sheet debts: personal guarantees, contractual commitments performed over time, ongoing or potential disputes not provisioned for in the accounts
• Mismanaging the escrow of the sale price: releasing the price before the opposition period has expired or before the tax and social security compliance certificates have been obtained exposes the seller to having to repay the sums received

It is crucial to draw up a full and accurate statement of liabilities before signing.

Issues relating to the commercial lease

Assignment of the leasehold right: a delicate stage

The leasehold right often represents a significant part of the value of the business. Clauses prohibiting the tenant from assigning the lease to the buyer of its business are deemed unwritten (Article L. 145-16 of the French Commercial Code). The lease may, however, make this assignment subject to the landlord's approval or to particular formalities, which must be identified and negotiated in advance.

Clauses that prohibit or restrict the assignment of the leasehold right alone, independently of the business, remain valid. In that case, the landlord's agreement must be obtained, or a consensual termination followed by a new lease in favour of the buyer should be considered.

The lease pitfalls to avoid

The most frequent mistakes concerning the commercial lease include:

• Ignoring the landlord's approval clause: many leases require the owner's prior consent to any assignment, or even the owner's participation in the deed – failure to comply with this clause may lead to termination of the lease
• Forgetting to notify the landlord: even where the lease allows free assignment, formal notification (by a commissaire de justice (bailiff) or by registered letter) to the owner is essential to make the assignment enforceable against the landlord
• Neglecting the guarantee clause: many leases provide that the assignor remains guarantor of payment of the rent by the assignee; the landlord may, however, rely on this clause only for three years from the assignment of the lease (Article L. 145-16-2 of the French Commercial Code), and a written waiver by the landlord can be negotiated
• Misunderstanding the regime introduced by the Pinel Act: the Act of 18 June 2014 did not create a pre-emption right for the landlord on the sale of the business or of the leasehold right; it introduced a right of first refusal for the tenant when the owner sells the premises (Article L. 145-46-1 of the French Commercial Code). On an assignment, the landlord may rely only on the clauses stipulated in the lease
• Failing to check the condition report and compliance: the seller may be held liable for unreported damage or for works carried out without the landlord's authorisation, which delays or jeopardises the sale
• Neglecting arrears of rent and service charges: any unpaid rent may justify the landlord's refusal to authorise the assignment or trigger termination of the lease even before the deed is signed

A prior analysis of the lease is necessary to identify these sensitive points.

Tax and social security aspects often neglected

The tax implications of the sale

The sale of a business has significant tax consequences that the seller must anticipate:

• Taxation of capital gains: the difference between the sale price and the net book value of the items sold is a taxable capital gain – its regime (short-term or long-term) depends on the holding period and the tax status of the business
• Possible exemptions: several schemes can reduce the tax burden – exemption for small businesses (Article 238 quindecies of the CGI if the value of the business is below €500,000), relief on retirement (Article 151 septies A), exemption based on receipts (Article 151 septies)
• VAT on tangible assets: in principle, the sale of a business as a whole is exempt from VAT (Article 257 bis of the CGI), but this exemption is subject to strict conditions – a partial sale or a failure to continue the activity may call this regime into question
• Immediate taxation of profits: for a business subject to income tax, the seller must notify the tax authorities of the sale within forty-five days and, if subject to a real regime, file the return of its profit within sixty days, these periods running from the publication of the sale in a medium authorised to receive legal announcements (Article 201 of the CGI); the corresponding tax is assessed immediately
• Registration duties: although they are borne by the buyer, their amount influences the price negotiation – they are 3% between €23,000 and €200,000, then 5% above that
• The CFE (business property contribution) and local taxes: apportionment pro rata temporis between seller and buyer must be provided for in the deed to avoid any dispute

Taxation of capital gains depends on the tax regime of the business and on the holding period of the items sold. Professional capital gains benefit from tapering reliefs based on the holding period.

VAT on tangible assets can represent a significant cost if the buyer is not subject to VAT or cannot deduct it.

The seller's social obligations

The transfer of staff raises delicate questions:

• Application of Article L. 1224-1 of the French Labour Code: all existing employment contracts are transferred automatically to the buyer, with continuity of seniority, pay and acquired benefits – the seller cannot dismiss employees beforehand to facilitate the sale
• Prior information of employees: in businesses that are not required to set up a social and economic committee (CSE) exercising the powers provided for in the second paragraph of Article L. 2312-1 of the French Labour Code, employees must be informed of the planned sale at the latest one month before it, so that they may submit an offer (Article L. 141-23 of the French Commercial Code, as worded following Law No. 2026-403 of 26 May 2026, applicable to sales concluded at least two months after its promulgation)
• Consultation of staff representatives: in businesses required to set up a CSE exercising those powers, the committee is informed and consulted on any plan to sell the business (Article L. 141-28 of the French Commercial Code)
• Final settlement for employees not taken over: if some employees are not transferred (exceptional cases), the seller must carry out their dismissal in accordance with the rules and provision for the corresponding indemnities
• The fate of social commitments: company health insurance scheme, profit-sharing agreements, company savings plan, customary practices and unilateral commitments – the seller must provide the buyer with a full statement
• Settlement of social security contributions: URSSAF and pension fund compliance certificates must be obtained before the sale to avoid blocking the escrow

These aspects require close coordination with the chartered accountant and the employment advisers.

Carelessness in post-sale follow-up

Supporting the buyer: a crucial issue

Many sellers consider their task finished as soon as the deed is signed. This approach can prove detrimental because the buyer may encounter difficulties requiring the seller's intervention.

Structured support during the first months facilitates the handover and reduces the risk of later disputes. This support may cover:

• Introducing key customers: organising meetings with long-standing customers, business partners and strategic suppliers to ensure continuity of relationships
• Passing on operational know-how: recipes, internal procedures, ways of working, technical particularities – everything that is not formalised in documents but is essential to the proper running of the business
• Technical assistance: for an agreed period (generally one to three months), the seller remains available to answer the buyer's questions on day-to-day management
• Managing the administrative transition: transfer of supplier accounts, change of holder of contracts (telephony, energy, insurance), updating of banking details
• Monitoring the non-competition clause: the seller must comply scrupulously with the terms of this clause to avoid any legal action by the buyer

Monitoring the warranties given

Contractual warranties do not lapse automatically on signature. The seller must remain vigilant as to:

• The duration of the liabilities warranty: while it runs (generally 2 to 3 years), the seller may be called on under the warranty for debts predating the sale that were not declared in the deed
• Monitoring the escrow: check the conditions for progressive or full release of the escrowed price and the limitation periods for oppositions, and claim release as soon as the conditions are met
• Keeping documents: keep all accounting, tax and social security documents relating to the period before the sale, the accounting documents and supporting evidence having to be kept for ten years (Article L. 123-22 of the French Commercial Code)
• Handling earlier disputes: disputes arising before the sale remain the seller's responsibility unless otherwise agreed – they should be followed actively and the risks provisioned for

Recommendations for a successful sale

The importance of professional support

The complexity of a sale of a business justifies the involvement of experienced professionals. A business lawyer secures the transaction legally.

The chartered accountant will optimise the tax and social security aspects, while a professional valuer will guarantee a reliable estimate of your business.

Preparing in advance: the key to success

A successful sale of a business is prepared several months in advance:

• 6 to 12 months before: carry out a full audit of your business (legal, accounting, tax, social security), identify and remedy weak points, update all contracts and administrative documents
• 4 to 6 months before: have the business valued by a professional, prepare a complete and attractive presentation file for potential buyers (sale memorandum), optimise the accounting presentation of the last financial years
• 2 to 4 months before: select serious buyers, begin negotiations, draft the letter of intent or heads of agreement, inform employees in compliance with the statutory time limits
• 1 to 2 months before: finalise the deed of sale with your lawyer, complete the preliminary formalities (notification of the landlord, consultation of the CSE), prepare the joint inventory
• On the day and afterwards: sign the deed, launch the legal publications, begin the support period, and ensure compliance with the timetable of post-sale formalities

This careful preparation enhances the value of your business and facilitates negotiations.

Conclusion: secure your sale to maximise its value

The sale of a business often marks the culmination of many years of personal and professional investment. The mistakes discussed in this article can permanently jeopardise this crucial transaction and cost you a significant part of your assets.

A methodical approach, compliant with legal obligations and supported by competent professional advice, will allow you to avoid these pitfalls. Do not hesitate to invest in quality legal support: the cost of these services will be more than offset by the securing and optimisation of your sale of a business.

The firm GLORIA AVOCATS acts in business law at the various stages of a project to sell a business (fonds de commerce).