The contribution and transfer of article 150-0 B ter of the CGI: a strategic lever for entrepreneurs

Introduction

The take-over mechanism provided for in article 150-0 B ter of the General Tax Code (CGI) allows the shareholders of a company to contribute their shares (shares or shares) to a company they control, generally a holding company, in exchange for the latter's shares. This operation entitles, under certain conditions, To a deferral of taxation of capital gain observed during the intake.

The objective of this system is to facilitate the reorganization of the assets of entrepreneurs and to promote the reallocation of capital towards economic activities, in particular through the financing of innovative projects or investment funds.

Some management companies, such as Founders Future, offer funds specifically designed to be eligible for 150-0 B ter, thus allowing selling entrepreneurs to secure their tax strategy while contributing to the emergence of future European tech and impact champions.

Understanding the transfer mechanism

Article 150-0 B ter of the CGI allows shareholders of French or European companies (or companies established in a State linked to France by a tax administrative assistance agreement) to postpone the taxation of the capital gain realized when they contributed their shares to a company subject to corporate tax (IS).

The main steps of the mechanism:

• Contribution of shares: The shareholder brings the shares of his company to a holding company that he controls, in exchange for shares from the latter.
• Tax deferral: The taxation of contributed capital gain is suspended as long as the holding company keeps the shares received.
• Transfer of shares by the holding company: If the holding company sells the shares contributed, the tax deferral is maintained if, within 24 months, at least 60% of the sale proceeds are reinvested in eligible economic activities.

‍

The conditions to benefit from the contribution and transfer regime

To secure the benefit of the tax deferral, several criteria must be met:

• Reasonable period: The sale of the shares brought by the holding company must take place within a reasonable time after the transfer, in principle of at least one year.
• Control: The contributor must hold, directly or indirectly, control of the holding company at the end of the contribution.
• Maintenance or reuse:
  
  • Maintenance: If the securities received in exchange for the contribution are retained, the tax deferral continues to apply.
  • Reuse: In the event of sale of the shares contributed, at least 60% of the sale proceeds must be reinvested in eligible commercial, industrial, artisanal, agricultural or liberal activities, or in funds that meet the criteria set by law.
• Compliance with the legal framework: The transaction must comply with the provisions set out in particular in articles 150-0 B ter and 150-0 B quater of the CGI.

In the event of non-compliance with these conditions, the deferral is called into question, and the capital gain initially recorded during the contribution becomes immediately taxable.

The advantages of a transfer

The transfer offers entrepreneurs several strategic benefits:

• Structure their assets through the creation of a holding company.
• Defer the payment of capital gains tax, thus making it possible to optimize the financial leverage effect.
• Reinvest in the real economy, by financing innovative companies or growth-promoting projects.
• Facilitate the gradual transmission or transfer of professional assets.
• Maximize returns by generating performance on gross tax capital.

‍

Why invest the fruit of a transfer in a fund rather than directly?

Investing in an eligible fund after a take-over transaction has several key advantages:

• Risk diversification: A fund invests in a broad portfolio of businesses or projects, thus reducing exposure to a single risk of failure.
• Professional management: The funds are managed by experienced teams, capable of selecting the best opportunities and managing investments over the long term.
• Compliance with 150-0 B ter: Labelled funds guarantee strict compliance with legal conditions for reuse, thus securing tax deferral.
• Access to major opportunities: Funds provide access to companies and sectors that are often inaccessible for direct investment.
• Simplicity and time savings: Administrative, legal and fiscal management is provided by the fund's teams, avoiding heavy individual management for investors.
• Cost efficiency: By pooling investments, costs (legal, financial, administrative) are optimized, unlike direct management, which requires expensive personalized advice.

Founders Future and 150-0 B ter eligibility

The Founders Future Conviction Entrepreneurs Fund was specifically designed to meet the eligibility requirements of article 150-0 B ter of the CGI. It thus allows selling entrepreneurs to:

• To reuse their sale proceeds in a fund that meets legal criteria.
• To extend the deferral of taxation of their contributed capital gain.
• To participate in the financing of European innovation, by supporting technological and impact companies with high potential.

Conclusion

The transfer mechanism is a major strategic tool for entrepreneurs wishing to optimize the management of their assets while actively contributing to the real economy.

Investing the fruit of a transfer in a fund like Founders Future Conviction Entrepreneurs offers a practical, secure and efficient solution, reconciling fiscal objectives and entrepreneurial ambitions.

To ensure the full security of a take-over transaction, it is strongly recommended to be accompanied by specialized tax, legal and financial experts.