When selling a business, a distinction must be made between two situations:
- The first is where the owner of the business itself owns the premises in which the business is run. In this case, the business sold will not include any leasehold rights. It will therefore be necessary to conclude a commercial lease with the vendor at the same time as the sale, so that the purchaser can continue to operate the business from the premises.
- The second situation is the most common where the seller of the business does not own the premises but has a commercial lease. This right to the commercial lease will therefore form an integral part of the business sold. However, this commercial lease is originally signed with the owner of the premises, who is a third party to the sale of the business. This is why, prior to any sale of a business, it is necessary to study the clauses of the commercial lease governing any transfer of the lease.
Various clauses may concern the transfer of the commercial lease. At New Deal Immobilier, we'd like to take a look at the most common clauses that may be important in the sale of a business.
- prior agreement of the lessor
The commercial lease may stipulate that the transfer of the business to a new tenant must be authorised by the lessor. Prior to the sale of the business, the approval of the new tenant (the purchaser of the business) must be sought from the lessor, in accordance with the formal rules set out in the commercial lease.
However, the lessor does not have discretionary power in this matter. The seller of the business can apply to the courts to overrule the landlord's refusal if it is unreasonable or without legitimate grounds.
- simple intervention by the lessor
The commercial lease may stipulate that the lessor must be involved in the transfer of the leasehold rights or the business. This clause must be respected at the time of sale: the lessor must be involved. However, the lessor will not be able to object to the transfer of the lease.
- Authentic form
It may be stipulated that the deed of transfer of the business should be drawn up in an authenticated form, i.e. by a notary.
- Use of the premises
Care must always be taken to ensure that the business activity authorised in the commercial lease is consistent with the business plans of the purchaser of the business, particularly if he or she wishes to add another activity to the business.
It is therefore very important to always check the clauses of the commercial lease before transferring the business. However, not all clauses are permitted.
- the prohibition in article L145-16 paragraph 1 of the Commercial Code
A clause in a commercial lease prohibiting the lessee from transferring his lease to the purchaser of his business is considered null and void. This prohibition ensures that the purchaser of the business will be able to continue the lease in its own name.
This nullity condemns clauses that prohibit assignment both directly and indirectly. A clause prohibiting the transfer of the leasehold rights to a company, or a clause requiring the lessee to operate the business personally for the last three years, making transfer impossible during this period, will therefore be considered null and void.