Business transfer and prior information of employees: a reform that (finally) simplifies the rules of the game

A well-intentioned mechanism on paper… but ineffective in practice and overly restrictive

Originally, the prior information requirement was designed to allow employees, in companies with fewer than 250 employees (and, for companies with 50 or more employees, subject to annual turnover not exceeding €50 million or a balance sheet total not exceeding €43 million), to make an offer to acquire their company in the event of a transfer (sale of a majority of shares, or transfer of a business as a going concern).

In practice, however, the results have been very limited:

• few actual employee buyouts,
• a system often perceived as complex,
• and above all, a concrete obstacle to transaction processes.

For many business leaders, the obligation to inform each employee individually, with proof of receipt, and then to wait up to two months before completing the sale, created a heavy constraint - sometimes difficult to reconcile with the confidentiality and responsiveness requirements inherent in such transactions.

A pragmatic and targeted reform

The legislator has chosen a simple approach: remove what does not work and streamline the rest.

End of the obligation in companies with 50 or more employees

In companies with 50 or more employees that have a works council (CSE) with extended powers, the obligation to individually inform employees is abolished. The CSE must, of course, still be consulted, in accordance with its usual prerogatives, on any proposed change affecting the company’s economic or legal organization (Article L. 2312-8 of the French Labor Code).

This change therefore puts an end to overlapping procedures, which had been a source of complexity.

A reduced one-month period for small companies

For companies with fewer than 50 employees, the obligation is maintained but simplified:

• the maximum period for employees to submit an offer is reduced from two months to one month,
• the transaction may still take place earlier if all employees waive their right to make an offer.

Result: a smoother transaction timeline.

More proportionate penalties

Another key development introduced by the law of April 15, 2026 is the significant reduction in financial risk, as the cap on civil fine is lowered from 2% to 0.5% of the sale price.

This change reflects a principle of proportionality, consistent with the intention not to impose excessive risk on transactions that may be strategic for the company’s survival.

Concrete consequences that facilitate business transfers

For business leaders and transaction stakeholders, these changes have immediate practical effects.

First, the removal of the obligation in companies with 50 or more employees significantly simplifies the conduct of transactions. It avoids the multiplication of formalities and greatly reduces an operational constraint that could affect the overall timeline of a deal.

Second, in smaller structures, the reduction of the timeframe to one month streamlines transaction schedules by limiting a period of uncertainty often incompatible with buyers’ requirements.

Finally, the easing of penalties reduces the legal risk associated with these transactions.

Overall, the reform rebalances the system. Without eliminating the objective of informing employees, it adjusts its implementation to reflect economic realities and operational constraints faced by businesses.

In practice, this means faster, clearer transactions… and more attractive opportunities for buyers.