Business transmission: mastering the contribution-sale before a sale

Selling your company often means turning a business asset into financial capital — and, in the process, triggering a heavily taxed capital gain. The contribution-sale mechanism, set out in Article 150-0 B ter of the French tax code, remains one of the most powerful tools to defer that tax and reinvest the proceeds intelligently.

The principle

Before selling, the owner contributes the shares of their company to a holding company they control. This contribution benefits from a tax deferral: the capital gain is recognised, but its payment is postponed. The holding company then sells the shares. As long as the proceeds are reinvested under the conditions set by law, the deferral is maintained — and the capital works in full, with no immediate tax erosion.

The reinvestment condition

The deferral is not a gift without strings. If the holding company sells the shares within three years, it must reinvest at least 60% of the proceeds in an eligible economic activity within two years: acquiring an operating company, subscribing to the capital of companies, or investing in certain funds (FPCI, FCPR) meeting the criteria. Failing that, the deferral lapses and the tax becomes payable, plus late-payment interest.

• Contribution of the shares to a controlled holding company, before the sale.
• Tax deferral on the contribution gain.
• Reinvestment of at least 60% of the proceeds within two years if sold within three years.
• Deferral maintained as long as the conditions are met.

A strategic tool, not blind optimisation

Used well, the contribution-sale allows an owner to finance a new venture, diversify their wealth or prepare a family handover, while preserving full investment capacity. Poorly calibrated — a badly structured holding, non-compliant reinvestment, a neglected timetable — it turns against the owner. It is a long-term arrangement, prepared before the sale and steered over several years. We support company owners at every stage: structuring the holding, selecting eligible reinvestments, and aligning the whole with the broader wealth and succession strategy.