The Bill on business growth and transformation and the Bill for the modernization of business transfers are important items on the Minister of Economy and Finance's end-of-year agenda.
While one Bill is promoted by the government and the other by the Parliament, both aim at simplifying the internal operation of companies.
This article focuses on two measures intended to remedy the shortcoming of previously implemented schemes that have been sometimes contested.
Reform of the obligation to inform employees of any contemplated sale of their company
The Law on social and solidarity economy dated July 31, 2014, commonly known as the "Hamon Law", imposed on small- and medium-sized businesses1 the obligation to inform their employees of any contemplated sale of their company.
This obligation to provide information initially applied to business owners who intended to transfer, free of charge or against consideration, their going concern or the majority of the share capital of their company, in order to make it possible for all or part of the employees to submit a purchase offer.
The contemplated transaction could not be implemented before the expiry of a 2-month period from the date on which the employees were informed thereof and failure to inform the employees incurred a heavy sanction as the Commercial Court had the power to order the nullification of the transaction.
As soon as it started being implemented on November 1, 20142, this obligation raised much controversy. Indeed, first of all, the scope of application of the obligation - which targeted "transfers" and, therefore, included situations where employees could not possibly submit a purchase offer - was too large. Secondly, the disproportional nature of the sanction that could be imposed in case of non-compliance - i.e. the nullification of the transaction - jeopardized the legal certainty of the company.
Fully aware of these issues, the Government amended this legal framework in the Law on growth, economic activity and equality of economic opportunities of July 10, 2015, commonly referred to as the "Macron" Law. The publication of its Implementing Decree was addressed in one of our former articles3. Actually, the obligation to provide information became only applicable in case of a contemplated sale of the business and the sanction was no longer the nullification of the sale but a civil fine that could not exceed 2% of the price.
Despites the laudable objective to encourage employee...