The decisive role of the chartered accountants
Transferring a business to its employees cannot succeed without the action of the chartered accountant who, as an adviser to the business, is well placed to support the strategic decision. You certainly know about the status of a worker cooperative, but did you know that it allows healthy companies to be taken over by their employees in many European countries? Here are the answers to your first questions:
1/ What is your client’s main interest?
To have a smooth transition
- Because transferors can support the employees taking over the business. They know the type of support needed by each employee taking over the business: management, sales, technical advice, etc.
- For the transfer, the business is converted directly into a worker cooperative; it keeps its trading company status (public limited company, private limited company, or a simplified joint stock company), identity and history. No new legal entity is created.
- The business retains its usual partners: banks, advisers and suppliers.
- In France a transitional worker cooperative is a new status that makes it easier for healthy SMEs to be transferred to their employees because it allows the worker-members, who, continue to hold majority voting rights throughout the process (seven-year time frame), to eventually become majority shareholders in their work tool.
2/ What is the first condition for a successful operation?
Anticipation. For this purpose, the French Law on the Social and Solidarity Economy, which was adopted in July 2014, has established a right for employees to be given advance notice with regard to takeover possibilities in businesses with fewer than 250 employees.
Regardless of the buyer, a business transfer takes time and, therefore, must be anticipated as much as possible. Discussion between the transferor and the employees as early before the transfer as possible guarantees a successful outcome.
3/ Will my client obtain an attractive price?
- The transaction amount takes into account the same objective data as in the other types of sale.
- In addition to this fair price, this is a reliable type of operation: those taking over the business know everything about it (the clientele, production tool, quality of the employees, etc.).
And discover even more here in our downloadable brochure