French company law prohibits financial assistance schemes in which a company sends or lends money to a third party for the purpose of subscribing to or acquiring its own shares, or grants a guarantee right, directly or indirectly. Similarly, any company must refrain from committing an abuse of its assets or acting in contradiction with its best interests. The rules on small capitalisation may also have an impact on acquisition financing transactions. What documents do buyers and sellers usually indicate when acquiring shares, a business or an asset? Are there any differences between the documents used for the acquisition of shares, unlike a company or an asset? Transfers from a company are subject to higher stamp fees, ranging from zero to 5 percent (for the fraction greater than 200,000 euros) of the purchase price. As a general rule, transfers of assets are not subject to stamp duty unless they are considered real estate. A seller`s limitations of liability generally depend on the type of insurance and guarantees (see question 27), with basic guarantees often being detracted from restrictions other than the seller`s aggregate liability ceiling, which can be agreed between the parties and which, in most cases, would correspond to the purchase price. What laws govern private acquisitions and disposals in your jurisdiction? Should the acquisition of shares in a company, enterprise or asset be subject to local law? It is customary for the seller to give assurances, guarantees and – less often – compensation, the extent of which is naturally discussed with the buyer, taking into account that these provisions generally constitute the longest part of a contract of sale. There is no legal distinction between insurance and guarantees on the one hand and compensation on the other, but since these provisions are designed to address different concerns, different conditions may apply. The duration of the transaction varies depending on the circumstances, but it usually takes three to five months to execute an agreement once the process has begun. Pricing is typically determined using the discounted cash flow method, determined on the basis of a business plan with post-closing adjustment mechanisms (net debt and working capital) derived from account closing.
It goes without saying that other evaluation methods may be used depending on the sector (e.g. B real estate companies prefer the revaluation method). . . .