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The Main Legal And Tax Elements To Consider In A Business Demerger In France


A business demerger is the process by which a company is split into two or more businesses. This can be done for a variety of reasons, such as to focus on a specific business area or to divest a non-core business. The process can be complex, so it’s important to seek professional guidance from a French real estate lawyer beforehand.

There are a number of legal and tax considerations to take into account when planning a business demerger in France. The main ones are discussed below.

What is a business demerger?

A business demerger is a process by which a single company is split into two or more distinct businesses. Generally, the process involves separating the assets and liabilities of the company, transferring employees to the new companies and setting up a new legal and tax structure for each business.

The main legal and tax elements to consider in a business demerger in France

When planning a business demerger in France, there are a number of legal and tax considerations to take into account.

Firstly, it is important to establish the legal structure of each newly formed business.

This involves taking into account the type of company, the shareholders, the corporate governance and liability arrangements, and any applicable laws or regulations. It is also important to consider the tax ramifications of a business demerger in France. This can be complex as there may be capital gains taxes, income taxes and transfer taxes that need to be taken into account.

  • Additionally, the demerged companies may need to register and declare various taxes, such as corporate income tax, value added tax, social contributions, local and municipal taxes, etc.
  • Therefore, it’s important to seek professional tax advice before proceeding.
  • The transfer of employees is another key consideration when planning a business demerger.

Companies need to ensure that all employees are aware of the change and take the necessary steps, such as changing their contracts, setting up new pension plans, and so on. Lastly, all stakeholders need to be kept informed throughout the process and consulted as necessary.


How can FRELA lawyers can provide guidance and help to demerge your business in France?

At FRELA, our real estate lawyers have the expertise and experience to ensure that your business demerger in France is successful and complies with all the relevant legal and tax requirements.

Our team of knowledgeable and experienced real estate lawyers can provide advice on the most suitable legal structure for the new companies and advise on the necessary steps to be undertaken.

We can also provide guidance on the applicable taxes and guide you through the transfer of employees. Furthermore, we can establish all the necessary contracts and paperwork needed to complete the demerger.


Business demergers in France can be complex and require careful planning to ensure it is successful. Therefore, it is important to seek professional guidance from a French real estate lawyer beforehand. The team at FRELA are experts in French real estate law and can provide the necessary advice and assistance needed to ensure your business demerger goes as smoothly as possible.

For further information, and to enroll in this securing process do not hesitate to contact Mr. Benoit LAFOURCADE.


About the Author :

Business lawyers, bilingual, specialized in acquisition law; Benoit Lafourcade is co-founder of Delcade lawyers & solicitors and founder of FRELA; registered as agents in personal and professional real estate transactions. Member of AAMTI (main association of French lawyers and agents).

FRELA : French Real Estate Lawyer Agency, specializing in acquisition law to secure real estate and business transactions in France.

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