Universal Transfer of Assets Procedure

Are you facing major economic difficulties and looking to set up a new company in another country?

Would you like to revitalize your business by opting for an international market?

Do you have the ambition to solve your economic and commercial problems, by giving new impetus to your business?

Would you like to group your companies and activities in a country with strong entrepreneurial dynamism?

The cross-border TUP solution is a legal and regulated procedure.

We can handle this procedure at an unbeatable cost of €890.

If you would like to find out more, please fill in the contact form, and an account manager will get back to you as soon as possible on working days.

As a preamble, there is an important difference between TUP and TUP-transfrontalière:

– a simple TUP is the absorption of a French company (A) by another French company (B); company A becomes the subsidiary of the holding company (company B), in proportion to the shares transferred,

– TUP-transfrontalière is the same process, except that the holding company (company B) is not French but foreign.

The assets and liabilities thus absorbed, in the context of a cross-border TUP, will be absorbed by a foreign and not a French holding company.

This clarification is important because the majority of TUP procedures carried out in France are TUPs (France/France) and not cross-border TUPs: to carry out a cross-border TUP, the foreign holding company must first be created, and this is exactly our core business.

We can therefore claim to be qualified to carry out cross-border Mergers & Acquisitions at very reasonable prices.

By way of exception, jurisprudence considers that a company which absorbs the assets and liabilities of another (via a cross-border TUP) “actively and passively takes the place of the absorbed company”. As a result, receivables and debts are automatically transferred to the absorbing company in the event of a universal transfer of assets and liabilities.

Impact of a universal transfer of assets and liabilities on guarantees applicable to transferred receivables

As surety bonds are an accessory to receivables, their transfer also appears to be automatic. Indeed, the majority of jurisprudence considers that surety bonds for transferred receivables are valid for receivables both prior and subsequent to the date of the universal transfer of assets, unless otherwise stipulated.

Cross-border TUP
Cross-border universal transfer of assets

Are you planning to close your company?

The universal transfer of assets and liabilities is an alternative to the dissolution-liquidation procedure.

It is a form of merger between two companies, commonly known as fusion par confusion or fusion-confusion.

In practice, company A owns 100% of company B, which it will make disappear by absorbing it.

The Universal Asset Transfer procedure is codified in article 1844-5 of the French Civil Code and article L236-3 of the French Commercial Code.

In practice, it enables a company to be closed down quickly and without constraints, with the advantage of attractive tax treatment. We adapt to the legal structure of your company, so that the TUP is possible.

So, if you have a SARL, SARLU, SAS or SASU to tupper, even if it’s directly owned by you (as an individual), we’ll make the necessary changes so that your company can ultimately be “absorbed”. Do you have another type of structure? Tell us about it.

Cross-border TUP update.

What is the Transmission Universelle de Patrimoine?

Transmission Universelle de Patrimoine (Universal Transfer of Assets and Liabilities) is a legal procedure specific to commercial companies, which consists of dissolving a subsidiary and transferring all its assets and liabilities to a parent company owning all its share capital.

In practical terms, this is dissolution without liquidation.

Difference between TUP and TUP- cross-border

TUP: the absorbed company and the absorbing company are French (assets and liabilities remain in France)
TUP-transfrontalière: the absorbed company is French and the absorbing company is foreign (assets and liabilities are relocated abroad).

What is the purpose of the Transmission Universelle de Patrimoine?

The Transmission Universelle de Patrimoine was created by the legislator to facilitate dissolution procedures.

It is an option for closing down a company, but it differs from the others, namely dissolution-liquidation, sale or transfer of a company, in its simplicity and reduced cost.

Indeed, thanks to the Transmission Universelle de Patrimoine technique, certain steps involved in the dissolution of a one-person business are not necessary, notably winding up the company, appointing a liquidator or a commissaire aux apports and setting down his or her powers and obligations, then drawing up a merger report.

Cross-border TUP ensures the continuity of a dissolved company's business activities

Transmission Universelle de Patrimoine is also an effective tool for restructuring a company in financial difficulty in the face of judicial liquidation.

Unlike dissolution-liquidation, which puts an end to the company’s economic activities, it enables these activities to continue after the subsidiary has been absorbed by the parent company.

In effect, the absorbed company disappears, but its assets continue to exist.

As the assets are transferred to the parent company, they are added to the latter’s assets, while the liabilities are covered by the funds at its disposal.

It is worth noting that the legal system of Universal Asset Transfer is particularly favored by commercial companies for international business operations.

Is your company in financial difficulties? Do you want to avoid a lengthy and costly judicial liquidation?

What are the advantages of Universal Wealth Transfer?

Universal inheritance offers several advantages :

it enables a company to be dissolved without being wound up;
the company disappears but its business survives, in the name of the absorbing company;
in a Transmission Universelle de Patrimoine, it is not necessary to appoint a commissaire aux apports or a liquidator;
contributions of movable and immovable property made as part of a Transmission Universelle de Patrimoine are not subject to VAT.

The Transmission Universelle de Patrimoine may have a retroactive effect on previous dissolutions without liquidation.

These must be recorded in the dissolution decision.

The assets and liabilities of the absorbed company are taken into account at the time of transcription.

Impact of cross-border TUP on taxation

From a tax point of view, the dissolved company benefits from a tax exemption on capital gains realized during the Universal Asset Transfer.

On the other hand, the parent company is also exempt from capital gains tax on the assets it absorbs.

This exemption remains valid even if the value of the shares increases after the transaction.

Effects of cross-border TUP on debts

Transmission Universelle de Patrimoine involves transferring all the assets and liabilities of an absorbed company.

Assets are generally made up of tangible assets such as real estate and vehicles, as well as trademarks, patents, copyrights, etc.

Liabilities include debts, receivables, shares, sureties and leasehold rights.

The tax system for cross-border TUPs

Under the provisions of Article 210 of the French General Tax Code, the absorbed company may benefit from the preferential merger regime, provided that it applies for it in advance, in the dissolution decision.

The transfer of assets does not give rise to a capital gain on the sale of assets.

As for the absorbing company, it is exempt from capital gains tax on the absorbed assets, as well as on the merger bonus (increase in the value of the shares after absorption of the dissolved company).

Subject to all reservations*, it is totally exempt from tax on liquidation surpluses. This is because the procedure involves dissolution without liquidation. And without liquidation, there is no liquidation surplus. Furthermore, the absorbing company is free to increase the value of its shares, without this being a consequence of the Universal Asset Transfer.

You cannot have a company absorbed that is involved in insolvency proceedings, a tax audit or reassessment, or in a contract (lease, loan, state aid, state-guaranteed loan, etc.); the TUP-transfrontalière is the sole responsibility of the client, and we are bound by an obligation of means and not of results.

Cross-border TUP (Transmission Universelle de Patrimoine) is a legal mechanism enabling the automatic transfer of all assets and liabilities of a company (or business) to another entity. This process is generally used as part of corporate restructurings or mergers & acquisitions.

In the cross-border context, this means that TUP is implemented between entities located in different countries. The applicable rules may vary according to the national legislation of the countries concerned and any international agreements that may be in place.

Cross-border TUP can be an effective solution for simplifying merger or restructuring operations between companies operating in several jurisdictions, sometimes avoiding lengthy and complex processes for transferring individual assets and liabilities.

In a nutshell:

Cross-border TUP (Transmission Universelle de Patrimoine transfrontalière) is a legal procedure enabling a company to transfer all its assets and liabilities to another entity, without prior liquidation, when the two entities are located in different countries.

Legal framework:
– In France, this procedure is mainly governed by Article L. 236-3 of the French Commercial Code and European directives, in particular Directive 2017/1132 on cross-border mergers.
– Each EU member state has its own national rules transposing this directive.

The assets and liabilities of the transferring company are automatically transferred to the receiving company.
The transferring company ceases to exist without liquidation.

Simplification of operations : Can facilitate the reorganization of a business.
Cost optimization: Avoids the costs associated with liquidation.
Business Continuity: Enables a smoother transition of activities and assets.

Cross-border TUP is a powerful tool for companies operating in several EU countries, offering an efficient way of transferring assets without going through complex liquidation processes.

Creation of the absorbing holding company for cross-border mergers and acquisitions

Setting up a subsidiary for a foreign holding company

Economic substance

A cross-border TUP can be carried out with companies of the following types: SASU, SARLU, EURL, SELARLU and also with companies of the following types: SAS, SARL, SELARL,… modified by you thanks to our online form at your disposal (you just have to fill in the form, we can help you) into SASU, SARLU, SELARLU,…. If your company is a SCI, SNC, SA, or SC, an additional legal announcement (290 € ht) will be required and an additional cost of 390 € ht (conversion cost). In all cases, there is always the cost of a legal announcement. EI and micro-businesses are not eligible for TUP. We provide resources and are not subject to any obligation of result. We do not draw up legal deeds or private deeds. We do not provide legal or tax advice. By ordering your TUP-transfrontalière documents from us, you declare that you are familiar with the TUP-transfrontalière procedure. You generate specific documents from an online form made available to you; these documents are personalized and generated automatically, after you have filled in the form. We do not intervene directly. The standard documents have been validated by a lawyer in the context of previous cross-border TUP procedures. The personalized procedure, which you automatically generate online on our website, is deemed to have been initiated by you via the data you have entered, which you declare authentic by the simple fact of having entered it. You must then submit the TUP file to the Clerk’s Office of the Commercial Court within the jurisdiction of your company’s registered office, at your own expense.

References :

https://cms.law/fr/fra/publication/les-tup-de-societe-apres-la-transposition-de-la-directive-sur-les-fusions-transfrontalieres

Code civil (Article 1844-5), Code de commerce (Article L. 223-4 et Article L227-4) : règles applicables en matière de dissolution sans liquidation.
25 mai 2022
Cour de cassation
Pourvoi n° 19-24.470
https://www.courdecassation.fr/decision/628dc7e082944a51aa242799?search_api_fulltext=19-24470&op=Rechercher%20sur%20judilibre&date_du=&date_au=&judilibre_juridiction=all&previousdecisionpage=&previousdecisionindex=&nextdecisionpage=&nextdecisionindex=

Quelques exemples de sociétés tuppées (TUP-transfrontalière) par notre intermédiaire :

(1)Please note: we do not give any advice, in particular tax advice, on cross-border TUP and or the creation of an extra-territorial company; you should seek advice from a tax lawyer before ordering a TUP or extra-territorial company from us. A cross-border TUP must be justified by an economic interest: a valid reason for tupping; you cannot organize your insolvency or transfer assets and liabilities without consideration. The company to which you transfer your company’s assets must have an economic reason for absorbing your company: similar activities, holding (management, financing), pooling of operating costs, human resources, infrastructure (movable (offices), real estate), clientele, added value, know-how, customer relations, intellectual property, etc. The creation of an offshore company remains your property if you are the beneficial owner: you are accountable to the authorities in your country of tax residence, even if you own only part of the offshore company. For cross-border TUPs, the cost of the legal announcement (around €290 excl. VAT) is added to the cost of the procedure (€890 excl. VAT); if the holding company does not yet exist and will belong to you, allow an additional €790 excl. VAT for its creation.

We do not draw up private deeds: we therefore do not personalize legal documents, we use the personalized documents you send us; you are therefore solely responsible for the data provided and transmitted; you will fill in an online form which will generate the specific documents. We are committed to an obligation of means and not of results. A TUP may be opposed by one or more creditors, within 30 days of publication of the legal announcement and, in particular thereafter, for failure to organize an economic substance (absence of premises, employee(s) and real administrative activity at the place of the absorbing Holding’s registered office (tuppant). Some or all of the online forms we provide have been validated several times by a lawyer, and have led to the successful completion of several cross-border TUPs before the competent courts. To register a TUP online, you will be asked to pay an additional fee of €490 (excl. VAT).

Even if the assets and liabilities of your French company are taken over by a holding company that may or may not belong to you, it should also be borne in mind that the organization of the economic substance of the absorbing holding company (tuppant) is mandatory: we can help you with this (ask us for a quote: this service is subject to an additional fee, on a case-by-case basis, on analysis of your request).

Find out more : What is economic substance?

ARRET-COUR D’APPEL DE DIJON LE 05 JUILLET 2018
ARRET COUR D’APPEL DE MONTPELLIER LE 18 DÉCEMBRE 2018
ARRET COUR D’APPEL DE LYON LE 02 NOVEMBRE 2017
ARRET COUR D’APPEL DE BORDEAUX LE 27 JUIN 2018
TRIBUNAL DU COMMERCE DE BOBIGNY LE 12 JUIN 2018
ARRET COUR D’APPEL DE MONTPELLIER, LE 17 OCTOBRE 2017, SOCIÉTÉ ISOPRO SARL
ARRET COUR D’APPEL DE VERSAILLES, LE 15 MARS 2016, SOCIÉTÉ PAR SCP HADENGUE
NOTE COUR D’APPEL DE PARIS, 20 SEPTEMBRE 2016,SOCIÉTÉ E-PARQUETS
NOTE COUR D’APPEL DE PARIS ,18 JANVIER 2014 ,SOCIÉTÉ SECURAMA
NOTE COUR D’APPEL DE ROUEN, 11 SEPTEMBRE 2014, SOCIETE SYS
COUR DE CASSATION AUDIENCE PUBLIQUE, LE 23 SEPTEMBRE 2014, SOCIÉTÉ RM2845 VERMOGENSVERWALTUNGS GMBH
ARRÊT COUR D’APPEL DE PARIS, 15 MARS 2012, SOCIETE OCEANITE
DÉCISION DE DISSOLUTION SUITE À UN TRANSFERT DE PATRIMOINE : SECTEUR DES ACTIVITÉS DE SÉCURITÉ PRIVÉE
DISSOLUTION CONFUSION TRANSFRONTALIÈRE : SECTEUR DU CONTRÔLE AUTOMOBILE

The drafting of private legal documents for third parties is governed by article 54 of the 1971 law, and is not defined in our body of legislation: models and standard letters: in a ruling dated March 15, 1999, the French Supreme Court (Cour de Cassation) ruled that they did not qualify as private legal documents. Our cross-border TUP service does not require us to personalize the form: it is our customers who personalize the deeds by entering their own data on the form. As intermediaries, we do not draw up private deeds; our work is purely administrative, just as we do not provide legal or tax advice, nor do we charge for advice.

Référence : https://www.village-justice.com/articles/Exercice-droit-petit-rappel-concernant,14677.html

https://akilys-avocats.com/2022/06/29/article-1844-5-du-code-civil-transmission-universelle-du-patrimoine-et-fraude/