The article in brief
- Four cost items are often confused: fees, registration duties, formalities costs and tax on any capital gain.
- Lawyers’ fees are freely set and fixed in an agreement concluded before the engagement begins.
- Analysing a rejected deed, drafting a new deed and taking over a matter already under way do not involve the same work.
- Seven factors affect the time required: number of shareholders, approval, asset structure, shareholder current accounts, warranties, formalities and urgency.
- No price range is published here: a quote is given after reading the file, not before.
Comparing two quotes for a transfer of shares in an SCI (société civile immobilière, a French non-trading property company) only makes sense if you compare the same services, and that is rarely the case. A displayed price may cover only the drafting of a standard deed, or the whole process from characterising the company to completing the formalities. Before looking at an amount, you need to know which items it includes, and which will be added in any event.
Four cost items, four different recipients
| Item | Paid to | How it is determined |
|---|---|---|
| Professional’s fees | Lawyer, notary or chartered accountant | Fee agreement for the lawyer; each profession’s own pricing |
| Registration duties | French Treasury (Trésor public) | Article 726 of the French Tax Code (Code général des impôts, CGI): 5% for entities whose assets are predominantly real estate, 3% with an allowance for other company shares |
| Formalities costs | Court registry (greffe) and formalities bodies | Rates specific to the formalities carried out |
| Tax on a capital gain | French Treasury | Separate regime, borne by the seller, distinct from registration duties |
These four items do not replace one another. A lower fee does not reduce the duties payable, and the absence of a capital gain does not exempt you from registration duties. The calculation of the duties owed to the Treasury (in French) follows its own rules, which have nothing to do with a professional’s remuneration.
What the fees actually cover
A lawyer’s work on a transfer of SCI shares breaks down into stages that are not all present in every matter.
- Characterising the company under Article 726, I, 2° of the Tax Code, based on the accounts. This determines whether the formal requirement of Article 1865-1 of the French Civil Code (Code civil) applies.
- Reviewing the transaction: articles of association in their applicable version, approval, signatories’ powers, chronology of dates, status of formalities.
- Drafting the deed, with the statements required by Article 726, III.B and the terms specific to the matter: price, payment terms, warranties, treatment of the shareholder current account.
- The countersignature (contreseing), by which the lawyer certifies having fully advised the party or parties they advise on the legal consequences of the deed, under Article 66-3-1 of the Law of 31 December 1971.
- Coordinating the formalities: enforceability against the company, publication in the Trade and Companies Register (registre du commerce et des sociétés), submission for registration.
- Taking over a rejected file: reading the reason for rejection, reconstructing the chronology, identifying the possible options.
A service limited to producing a document without characterising the company does not cover the first stage, even though it is the one that decides everything else.
Seven factors that change the time required
- The number of shareholders and the need to obtain approval, with notification of the proposed transfer as provided for by Article 1861 of the Civil Code.
- The asset structure: a single building is quickly characterised; a chain of shareholdings requires tracing the assets of the companies held.
- The existence of shareholder current accounts, which call for separate documentation and a mandatory statement in the deed.
- The negotiated warranties: warranty and indemnity (garantie d’actif et de passif), escrow, staggered payment of the price.
- The status of formalities: a fresh file is handled in order; a file already partly under way first requires finding out what has been done.
- The existence of a rejection or a dispute, which adds an upstream analysis phase.
- Urgency, in particular when the one-month deadline of Article 635 of the Tax Code has already started to run.
The fee agreement
The lawyer’s fees are set by agreement with the client, before the engagement begins. This agreement specifies the engagement, its scope, the calculation method used and what remains outside its scope. It is the tool that makes a meaningful comparison of two proposals possible: it is not the amount you should read first, but the definition of the engagement.
The firm does not publish a price range. A figure announced before reading the articles of association and the accounts would be an unfounded estimate, and it would be revised as soon as the first document arrived. What the firm does state, on the other hand, is the exact scope before any commitment.
Who pays what
The allocation of costs between seller and buyer is a matter for negotiation and is set out in the deed. Unless the deed provides otherwise, registration duties are borne by the buyer, as the new holder of the shares (Article 1712 of the Tax Code (in French)): what the deed says prevails.
Tax on any capital gain, by contrast, is a personal charge of the seller, linked to the seller’s own situation and not to the transaction itself. It is not negotiated between the parties.
Reducing the cost without reducing legal certainty
The most effective lever is not negotiating the rate: it is the quality of the file you provide. Complete articles of association in the right version, up-to-date accounts, a statement of current accounts and proof of the formalities already completed remove several rounds of back-and-forth. The list of documents to prepare (in French) is designed for that purpose.
The second lever is timing. A file handled before signing costs less than one taken over after a rejection, because it requires neither reconstructing the chronology nor analysing the possible next steps. Taking over a rejected deed (in French) always takes longer than making a project legally sound from the outset.
Conversely, the apparent saving of a free template is misleading for a company within the scope of Article 1865-1: a deed that does not take one of the three permitted forms will not be registered, and its fate will have to be examined. You can submit your project to the Corporate/Tax team to obtain a costed scope.
Frequently asked questions
Is a lawyer cheaper than a notary?
The two professions do not charge under the same rules and do not carry out exactly the same work. Comparing two amounts without comparing the engagements tells you nothing.
Do the fees depend on the sale price?
They depend on the work required. The sale price has an indirect influence, because it often comes with heavier warranty and valuation issues.
Do you charge for a quote?
The definition of the scope and the fee proposal follow an initial scoping discussion. The firm does not charge for an engagement proposal.
Are registration duties included in the fees?
No. They are owed to the French Treasury and calculated under Article 726 of the Tax Code, with a minimum charge of €25 set by Article 674.
What happens if the engagement expands along the way?
An extension of the scope gives rise to an amendment to the fee agreement, discussed before it is implemented.
Official sources
- Article 726 of the French Tax Code (rates of 5% and 3%, allowance, tax base, mandatory statements) – Légifrance (in French)
- Article 674 of the French Tax Code (minimum charge of €25) – Légifrance (in French)
- Article 1865-1 of the French Civil Code (permitted forms, failing which the transfer is void) – Légifrance (in French)
- Article 66-3-1 of Law No. 71-1130 of 31 December 1971 (advice certification attached to the countersignature) – Légifrance (in French)
- Article 635 of the French Tax Code (one-month deadline for registration) – Légifrance (in French)
- Article 1861 of the French Civil Code (approval and notification of the proposed transfer) – Légifrance (in French)
This article presents the state of the law for general information purposes. It does not constitute legal advice. Every situation is different and deserves a dedicated analysis. Content compliant with the professional conduct rules of the legal profession.
