Transferring professional practice companies (SEL)

Yes. Regulated professional activities are eligible for the Dutreil pact (French Tax Code, article 787 B), in the same way as industrial, commercial, craft or agricultural activities. The transfer of shares in a professional practice company can therefore benefit from the 75% exemption from gratuitous transfer duties. This regime requires a collective retention commitment over the shares of at least two years, extended by an individual commitment of four years after the transfer, together with the exercise of a management function by one of the signatories to the pact.

A professional practice company (société d'exercice libéral), or SEL, is a corporate form allowing members of a regulated profession to carry on their activity through a capital structure (physicians, lawyers, chartered accountants, notaries and pharmacists, among others). It was created by the Law of 31 December 1990, whose provisions were recast by the Ordinance of 8 February 2023 on the corporate practice of regulated professions. The SEL differs from an ordinary commercial company by the specific rules governing ownership of its capital.

Ownership of the capital of an SEL is essentially reserved for professionals actively practising within the company. The law requires these professionals to retain a decisive share of the capital and voting rights, while the participation of third parties, former partners or other categories of persons is strictly regulated. These rules, derived from the Law of 31 December 1990 and the Ordinance of 8 February 2023, vary from one profession to another. They directly condition the options for transferring the shares, which cannot be freely passed on to persons who lack the required professional status.

Retirement changes the professional's practising status, which may interfere both with the capital ownership rules and with any ongoing Dutreil commitments. The timetable must be anticipated: the cessation of activity may call into question the share of capital reserved for practising professionals, and the obligation to hold a management function during the commitment period must be aligned with the principal's gradual withdrawal. The firm organises this transition by synchronising it with the arrival of the successor partner or professional successor.

The Ordinance of 8 February 2023 on the corporate practice of regulated professions recast and clarified the legal framework previously derived from the Law of 31 December 1990. It reorganises the corporate forms of practice, specifies the capital ownership and governance rules applicable to professionals, and harmonises the regime of the various professional structures. For a transfer transaction, it is the reference text to consult, alongside the rules specific to each profession, in order to verify that the intended allocation of the capital is valid.

Yes. The transfer of a professional practice company can combine the Dutreil exemption (French Tax Code, article 787 B) with a shared gift (donation-partage). The shared gift allows the shares to be allocated and passed on during the principal's lifetime, fixing their value on the date of the deed and preserving equality between the heirs, while the Dutreil pact reduces the tax cost of the transaction. This combination must nevertheless remain compatible with the profession's capital ownership rules: the heir or heirs intended to hold the shares must, where required, have the necessary professional status. See our dedicated page on the family buy out.

The risks relate first to compliance with the capital ownership rules: a transfer to a person who lacks the required professional status, or an allocation of the capital that does not comply with the Law of 31 December 1990 and the Ordinance of 8 February 2023, may be challenged. They relate next to compliance with the Dutreil commitments: a disposal of shares or the loss of a management function during the retention period may forfeit the 75% exemption. They relate finally to the retirement timetable, whose poor coordination can weaken the entire structure. Each aspect requires precise coordination, which calls for tailored advice.

No. While the general framework results from the Law of 31 December 1990 and the Ordinance of 8 February 2023, each regulated profession retains its own rules, laid down by its specific texts and its professional body or supervisory authority. Capital ownership thresholds, the conditions for admitting new partners and the procedures for transferring shares may vary from one profession to another. A professional practice company transfer therefore requires verifying, beyond the common principles, the particular requirements applicable to the profession concerned. The firm coordinates the tax analysis with these professional conduct constraints.