On Monday 4 November, the European Commission authorised an amendment to the French scheme to facilitate the takeover of a company by its employees. The Aid is granted in the form of a tax credit for companies specially created to acquire all or part of the capital of a company.
The amendment consists in removing the condition relating to the minimum number of employees allowing the purchasing company to benefit from the tax credit and thus allowing only one employee transferee to benefit its company. The revised cost of the measure, financed by the French general budget, will be 6 million euros for the period 2019-2022.
The Commission considered that the tax credit is in line with Community policy to facilitate the transfer of businesses, whereas such transfers are often complex in view of regulatory and tax constraints, lack of knowledge of the formalities to be completed and the lack of market transparency for such transactions. Thus, the tax credit makes it possible to reduce market failures that affect the takeover of a company by its employees. The Commission noted that the measure is proportionate to the objectives pursued, the tax credit being limited to the amount of interest due on loans contracted with a view to repurchase and with the rational of the percentage of shares held by the employee purchasers. (Original version in French by Lionel Changeur)