Giving your sole trader business to a relative — the 7 steps and the real cost

A sole trader may pass their business on to a family member without asking for any financial consideration. The gift is subject to several formalities designed to protect the donor, the donee and the creditors of the business. The process has seven steps: choose the type of gift (simple gift, gift-partition, or a gift of bare ownership only with reservation of the usufruct), identify the assets to be transferred, draw up the transfer deed — drafting it is COMPULSORY —, register it with the tax registration office, pay the gift duty, comply with the publicity formalities, then file the income and VAT returns. Two schemes cut the cost sharply: the Dutreil pact, which gives a partial exemption of 75 % of the value of the business, and early transmission, which adds a 50 % reduction of the gift duty where the donor is under 70. They CUMULATE with each other and with the allowances based on the family relationship.

Up to date for 2026 — verified on September 12, 2026Official procedure, no printed formGuide: about 45 min

Deadlines

Registration of the deed: immediately, or within one month: The transfer deed must be filed with the tax registration office WITHOUT DELAY where it is a private deed, or within 1 month of signature where it is a notarial deed.
1 month for publicity: The transferor has 1 month from the transfer of the business to publish a notice in the Bodacc — through the commercial court registry of the registered office — or in an authorised legal announcements medium in the department where the activity is carried on.
1 month for creditors to object: Creditors have 1 month from publication to object to the transfer of the professional estate, by registered letter with acknowledgement of receipt or by extrajudicial act served at the transferee's home address. The objection does NOT prevent the universal transfer, which takes place on expiry of the period.
45 days to declare the cessation of activity: The transfer of the sole trader business or of its goodwill is analysed as a cessation of activity, to be declared on the company formalities window within 45 days of publication of the transfer in the legal announcements medium.
60 days for the income return: The transferor must file their income return — no. 2031 for BIC, no. 2035 for BNC, no. 2065 for corporate income tax — within 60 days of publication of the transfer in a legal announcements medium.
60 or 30 days for VAT: A transferor liable to VAT declares and pays the VAT on all transactions not yet declared at the date of the transfer: 60 days from publication under the simplified actual regime, 30 days under the normal actual regime. The tax authorities grant an extra 15 calendar days to complete the electronic procedure.

Documents to prepare

Transfer deed drawn up, in 2 copies for registration — drafting it is compulsory
Declaration of transfer of goodwill or customer base, in 3 copies
Declaration of the state of the equipment and new goods transferred, in 3 copies
Turnover and operating result for the 3 financial years preceding the transfer
State of the pledges over the goodwill for the preceding 10 years, or an express statement that there are none
Terms of the commercial lease: date and duration, rent, renewal terms, identity and address of the landlord
Written consent of each creditor whose debt is transferred
Consent of the spouse where the transferor is married under the community property regime
For tertiary buildings of at least 1,000 sq m, the latest annual digital certificate generated by OPERAT
Descriptive statement of the professional estate transferred, to accompany the publicity notice
Payment of the registration duty (cash up to €300, cheque or bank transfer)

See the procedure on the official site

No form is attached to this procedure: the link leads to the official page that describes it.

What this page gives you

The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.

Who this applies to

The head of a sole trader business who wants to pass it on during their lifetime to a family member without financial consideration
A business owner with a single child, proceeding by simple gift, to transfer ownership of the professional estate to one heir
An owner with several heirs proceeding by gift-partition: one receives the business, the others assets or gifts of money, and where the business goodwill makes up most of the estate, the recipient compensates the others with a cash payment known as a soulte
The owner who wants to pass the business on while keeping the income from the activity: they give only the bare ownership and retain the usufruct
The donee, who in principle bears the gift duty — unless a clause of the deed places the tax on the donor
NOT covered: businesses whose main activity is managing their own movable or real-estate assets (an SCI, for example), for the purposes of the Dutreil pact
The universal transfer of the professional estate IS NOT VALID where one of the parties has been subject to personal bankruptcy

Worked example

Example: a business worth €320,000 passed to a son, €44,000 of duty without any scheme — and what Dutreil does to it

A business owner passes on to his son a business worth €320,000: that is the value of the gift. A gift to one of one's children has two consequences. An allowance of €100,000 applies, i.e. 320,000 − 100,000 = €220,000. The tax scale is set at 20 %. The gift duty therefore amounts to 20 % of €220,000, i.e. €44,000. The registration office always proceeds in this order: it takes the value of the gift, deducts any allowances, then applies a tax scale to the resulting value — the amount of the allowance and the rate varying with the family relationship. Two specific reductions may be added. The Dutreil pact gives a partial exemption from gift duty of 75 % of the value of the business: in other words, only a quarter of that value is taken into account in computing the duty. Early transmission adds a 50 % reduction of the gift duty where the donor is under 70 at the time of transfer, on the same conditions as the Dutreil pact. The two schemes cumulate with each other and with the allowances based on the family relationship. Finally, had the father chosen to give only the bare ownership and keep the usufruct, the duty would have been computed on the value of the bare ownership alone, which depends on his age: 40 % below 51 full years, 50 % below 61, 60 % below 71. On the donor's death, the usufruct ends and the donee becomes full owner with no additional duty to pay.

How to fill it in, step by step

Choose the type of gift: a simple gift where there is a single child, a gift-partition to share the assets among family members — the recipient of the business then compensating the other heirs with a soulte where the goodwill makes up most of the estate —, or a gift of the bare ownership alone with reservation of the usufruct.
Identify the assets to be transferred: a full gift entails a universal transfer of the professional estate, that is all the assets, rights, obligations and security interests needed for the activity — assets AND liabilities. Note that the universal transfer is the DEFAULT regime, and that a partial transfer remains possible, for instance the transfer of the goodwill alone without the real property or the debts.
Check the perimeter of the goodwill transferred: customer base, sign and trade name, lease rights, furniture, equipment and tools, stock and goods, intellectual property rights, sums of money, employment and insurance contracts; and, for a universal transfer, the buildings used for the activity, the receivables, the security interests and the debts. Obtain the creditor's WRITTEN CONSENT for any debt transferred — social security contribution debts, for their part, are not included in the transfer.
Draw up the transfer deed: drafting it is compulsory. State the intangible and tangible items transferred, the identity of the parties, the date and nature of the deed (notarial or private), the origin of the goodwill, the turnover and operating result for the last 3 financial years, the state of pledges over the last 10 years, the terms of the commercial lease and, where the transferor is married under the community property regime, the spouse's consent.
For buildings or parts of buildings used for tertiary purposes of at least 1,000 sq m, annex the assessment of compliance with the energy consumption reduction obligation, based on the latest annual digital certificate generated by OPERAT.
Register the deed with the tax registration office by filing, in person or by post: the transfer deed in 2 copies, the goodwill transfer declaration form in 3 copies, the declaration of the state of the equipment and goods transferred in 3 copies, and payment of the registration duty (in cash up to €300, by cheque or by bank transfer).
Pay the gift duty: it is in principle borne by the recipient, but the transfer deed may provide that the donor bears it — in which case the amount of the duty is not treated as an additional gift.
Check whether the Dutreil pact applies, against its 4 cumulative conditions: the donor has held the business for at least 2 years (no period is required where they created it or acquired it for free), each recipient undertakes to keep the business and the assets allocated to it for 6 years, one of the recipients undertakes to continue the activity for 3 years as their habitual and principal occupation, and the main activity of the business is commercial, craft, industrial, agricultural or professional, excluding the management of its own movable or real-estate assets.
Publish the transfer notice within the month of transfer, in the Bodacc through the commercial court registry of the registered office, or in an authorised legal announcements medium in the department of activity — with the surname, first names and trade name of the transferor and the transferee, the activity and APE code, the address of the main establishment and the Siren number, together with the descriptive statement of the professional estate transferred.
Declare the cessation of activity on the company formalities window within 45 days of publication, then file the income return within 60 days and the VAT return within the period specific to your regime, electronically in EFI or EDI mode.

The form, line by line

Type of gift: Simple gift, gift-partition, or gift of the bare ownership alone. The choice governs the protection of the other heirs (the soulte) and the cost of the gift duty.
Descriptive statement of the professional estate transferred: It accompanies the publicity notice: overall value of the assets, list of the security interests the business benefits from and the amounts of the secured claims, overall value of the liabilities, list of the assets encumbered by a security interest with its nature and the secured amount. It is drawn up on the last closed financial year updated at the date of transfer.
Declaration of transfer of goodwill or customer base: To be filed in 3 copies with the tax registration office, with the transfer deed in 2 copies.
Declaration of the state of the equipment and new goods transferred: The second form in the registration filing, also in 3 copies.
Who bears the gift duty: By default the recipient. A clause of the deed may place it on the donor: the amount is then not treated as an additional gift.
Retention undertaking (6 years) and continuation of activity (3 years): The two undertakings of the Dutreil pact. The first binds EACH recipient of the gift, the second ONE of them, who must carry on the activity as their habitual and principal occupation.
Age of the donor on the date of transfer: Two distinct effects: being under 70 opens the 50 % reduction for early transmission; the age of the usufructuary determines the value of the bare ownership under the statutory scale.

Good to know

The universal transfer of the professional estate is the default regime, but it is not compulsory: the owner may carry out a partial transfer and dispose of items separately, for example the goodwill alone without the real property or the debts.
Social security contribution debts are NOT included in the universal transfer — they stay with the transferor, even though all the rest of the liabilities pass to the donee.
Transferring a debt requires the creditor's written consent: without it the debt does not pass, even in a transfer presented as universal.
Since 21 July 2019, stating in the deed the information on the origin of the business, the state of pledges and the results of the last 3 financial years is no longer compulsory — but including it allows the deed to be concluded in full transparency between the parties.
Using a gift with reservation of usufruct substantially reduces the cost of a transmission: the duty is computed on the value of the bare ownership alone, and the younger the owner, the lower that value — and hence the duty.
The Dutreil pact gives a partial exemption from gift duty of 75 % of the value of the business: only a quarter of that value enters the computation.
The early transmission scheme cumulates with the benefits of the Dutreil pact and with any allowances based on the family relationship.
A creditor's objection does not prevent the universal transfer of the estate, which takes place on expiry of the objection period; the judge examines the merits of the claim and, where appropriate, orders repayment, the transferor then being liable on all their present and future movable and immovable assets, save their main residence.
The transfer is exempt from VAT where it covers all the items of the goodwill and the transferee is themselves liable to VAT: the exemption then covers all the assets and services transferred.
Paper forms can no longer be sent for the income or VAT return: it is filed in EFI mode, by online entry on the impots.gouv.fr professional account or the portailpro.gouv.fr account, or in EDI mode through a dedicated exchange software. The tax authorities grant an extra 15 calendar days for the electronic procedure.

Common mistakes

Believing that a gift of a business needs no written deed: drafting a transfer deed is compulsory.
Waiting a month to register a private deed: the one-month period applies only to a notarial deed, a private deed is filed WITHOUT DELAY.
Filing the forms in a single copy: the transfer deed is filed in 2 copies, the goodwill transfer declaration and the declaration of the state of the equipment in 3 copies each.
Transferring a debt without the creditor's written consent.
Counting social security contribution debts among the liabilities transferred: they are not included in the universal transfer.
Forgetting the spouse's consent in the deed where the transferor is married under the community property regime.
Neglecting publicity: it is what makes the transfer enforceable against third parties, and it must take place within the month of transfer.
Publishing without the descriptive statement of the professional estate transferred, which must accompany the notice.
Counting the cessation filing period from the signature of the deed: the 45 days run from PUBLICATION of the transfer in the legal announcements medium, as do the 60 days for the income return.
Applying the 60-day VAT deadline under the normal actual regime: that regime allows only 30.
Counting on the Dutreil pact for an asset-holding company: the activity of managing one's own movable or real-estate assets, such as an SCI, is expressly excluded.
Believing that a 2-year holding period is required in all cases: no period is required where the donor created the business transferred or acquired it for free.
Ignoring the personal bankruptcy of one of the parties: the universal transfer of the professional estate is then not valid.

Frequently asked questions

Is a deed compulsory to give away a sole trader business?

Yes. Drafting a transfer deed is compulsory, whether notarial or private. It must state, among other things, the intangible and tangible items transferred, the identity of the parties, the date and nature of the deed, the origin of the goodwill, the turnover and operating result for the last 3 financial years, the state of pledges, the terms of the commercial lease and, where relevant, the consent of a spouse married under the community property regime.

What is the universal transfer of the professional estate?

It is the transfer of all the assets, rights, obligations and security interests needed for the activity: the transferor passes on both the assets and the liabilities of the business. It is the default regime, but a partial transfer remains possible — for example the transfer of the goodwill alone without the real property or the debts. Social security contribution debts are never included in the transfer, and transferring a debt requires the creditor's written consent.

How much does giving a €320,000 business to one's son cost?

With no specific scheme: an allowance of €100,000 applies, i.e. 320,000 − 100,000 = €220,000, to which the 20 % scale is applied, i.e. €44,000 of gift duty. The Dutreil pact and early transmission can cut that amount sharply.

What are the conditions of the Dutreil pact?

Four cumulative conditions: the donor has held the business for at least 2 years — no period is required where they created it or acquired it for free; each recipient undertakes to keep the business and the assets allocated to it for 6 years; one of the recipients undertakes to continue the activity for 3 years from the transfer, as their habitual and principal occupation; and the main activity of the business is commercial, craft, industrial, agricultural or professional, excluding any activity of managing its own movable or real-estate assets. The partial exemption then covers 75 % of the value of the business.

What does early transmission add?

Where the donor is under 70 at the time of the transfer, a 50 % reduction applies to the amount of the gift duty, on the same conditions as those set out for the Dutreil pact — nature of the activity, holding period, continuation of the activity. That scheme cumulates with the benefits of the Dutreil pact and with the allowances based on the family relationship.

How does a gift of bare ownership alone work?

The owner gives the bare ownership and keeps the usufruct. The gift duty is then computed on the value of the bare ownership alone, which varies with the owner's age at the time of transfer: 10 % below 21 full years, 20 % below 31, 30 % below 41, 40 % below 51, 50 % below 61, 60 % below 71, 70 % below 81, 80 % below 91 and 90 % beyond. On the donor's death, the usufruct ends and the donee becomes full owner with no additional duty to pay.

What tax returns does the gift trigger?

The transfer is analysed as a cessation of activity: it is declared on the company formalities window within 45 days of publication. The transferor then files an income return within 60 days of that publication — no. 2031 for BIC, no. 2035 for BNC, no. 2065 for corporate income tax — and, if liable, a VAT return within 60 days under the simplified actual regime or 30 days under the normal actual regime. Everything is filed electronically, in EFI or EDI mode, with an extra 15 calendar days granted for the electronic procedure.

Can a creditor block the transmission?

No. Creditors have one month from publication to object to the transfer, by registered letter with acknowledgement of receipt or extrajudicial act served at the transferee's home address, stating the amount and the grounds of the claim. The judge examines the merits of the claim and, where appropriate, orders repayment. But the objection does not prevent the universal transfer of the estate, which takes place on expiry of the objection period.

Go further

Compute the related amounts

Gift tax calculator

Understand this form: the related course

Transferring wealth by gift during your lifetime

Related forms

Official sources

Read in French

Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.