Valuing Parts Sociales in a French SARL: Method, Discounts and Tax

Valuing parts sociales starts from enterprise value, from which net debt is deducted to obtain equity value, before applying the ownership percentage. A discount specific to the block (minority, illiquidity) may then apply, case by case and with no set scale. For tax purposes, the French tax authority in principle uses neither a control premium nor a minority discount when valuing unlisted shares, but different weightings depending on whether or not the block carries decision-making power. On completion, the seller bears the flat tax of 31.4 % and the buyer pays 3 % registration duties.

This step is often overlooked, and it can move the price significantly. Valuation methods (asset-based, earnings multiples, discounted cash flows) produce the value of the BUSINESS, meaning the value of the economic asset regardless of how it is financed. They are set out in our 2026 guide to valuation benchmarks and methods; there is no point repeating them here.

What matters in this article is what happens AFTERWARDS. The calculation chain runs as follows:

1. Enterprise value (for instance a multiple applied to adjusted EBITDA).
2. Less net financial debt, meaning borrowings and financial liabilities less available cash.
3. Equals equity value, in other words the value of 100 % of the shares.
4. Multiplied by the percentage being transferred.
5. Adjusted for the discounts or premiums specific to the block concerned.

In transaction files this step has a name: the bridge. It looks mechanical. It is not.

What actually belongs in net debt#

Net debt is not the "borrowings" line on the balance sheet. In practice, in a SARL or an EURL, several items recur file after file:

• Bank loans, capitalised finance leases and overdrafts.
• Genuinely available cash, excluding any liquidity pledged or blocked as security.
• Shareholder current accounts, which are legally receivables and not capital. The seller's current account is repaid or assigned in addition to the price of the shares: it is never merged into the value of the securities.
• Debt-like items: overdue social security or tax liabilities, provisions for employment litigation, unprovided retirement indemnities, declared but unpaid dividends.
• Normative working capital, where working capital at completion departs from its usual level.

That last point is often debated in negotiations. A company that has collected in advance, or conversely allowed its receivables to drift, shows a cash position at completion that is not representative. The adjustment is legitimate; it must be documented.

Net asset value, a frequent case in practice#

For many holding-type structures, in particular SCIs and low-activity companies, the value of the shares is calculated directly from adjusted net book assets: revalued assets less liabilities. The reasoning and the applicable discounts are covered specifically in our article on valuing SCI shares, because the issues there are different (property revaluation, treatment of current accounts, approval clauses).

This is a frequent point of friction between shareholders. The exiting shareholder applies simple arithmetic. The buyer knows exactly what is being purchased: a financial right, not power.

The minority discount#

Holding 10 % of a SARL means deciding nothing. Not dividend distribution, not the manager's remuneration, not strategy, not the sale of the fonds de commerce. A minority holder is subject to majority decisions and has no means of forcing cash out of the company. Economically, that stake is worth less than its arithmetic share, and this reality may translate into a discount.

The magnitude depends on the actual configuration. A 34 % block carrying a blocking minority on extraordinary resolutions is not discounted like a 5 % block with no leverage at all. Conversely, a block that tips the majority to the buyer may justify a premium, because it purchases control and not merely securities.

For tax purposes, the DGFiP guide (2026 edition) takes another approach: when valuing unlisted shares, the tax authority in principle uses neither a control premium nor a minority discount, but different weightings of the methods depending on whether or not the block carries decision-making power. The guide also warns against double counting: where the method used already reflects the minority position (notably yield value, listed comparables, discounted cash flows), adding a minority discount can lead to counting the absence of control twice.

The illiquidity discount#

A SARL share cannot be sold in one click. There is no market, no listing, no available counterparty. The seller must find a buyer, negotiate, obtain approval and clear any pre-emption right. That time and that uncertainty carry a price.

The DGFiP guide, which remains the tax authority's reference for valuing unlisted securities, frames this discount. It is required in two cases: where the company is valued on the adjusted net asset approach alone, and where the valuation relies on stock market data (rates or multiples). It is not justified where the combination of methods arrives at the company's real value, and it is necessarily smaller where the company holds significant liquid assets. In every case, its level cannot simply be asserted: it must be argued by reference to the size of the company, the genuine liquidity of its shares and the constraints in the articles.

See: DGFiP, guide de l'évaluation des entreprises et des titres de sociétés.

Clauses in the articles change the value#

Many shareholders read their articles of association for the first time on the day they want out. Several clauses bear directly on price:

• The approval clause (clause d'agrément), mandatory in a SARL for transfers to third parties, which narrows the pool of possible buyers. Its effect on value is assessed by weighing its advantages and its drawbacks: this is what the Cour de cassation held on 1 April 1997 (Marion ruling), with a 10 % discount applied in that case. The DGFiP guide also notes that, if approval is refused, there is as a rule an obligation to acquire the shares or have them acquired: the clause then merely defers the sale, which can limit the discount.
• The pre-emption right in favour of existing shareholders, which limits competition between purchasers.
• Tag-along or preference clauses, which by contrast can protect the minority holder and reduce the discount.
• A price or valuation-method clause in the articles, which binds the parties, sometimes to their considerable regret years later.

Reading the articles BEFORE valuing is not a formality. It determines whether a discount is justified, and at what level.

Split ownership (démembrement) is common in family transfers: the owner-manager gifts the bare ownership to the children and keeps the usufruct, therefore the dividends and part of the control.

Two logics coexist, and you need to know which one applies.

For tax purposes, article 669 of the CGI sets a scale based on the AGE of the usufructuary: 90 % of full ownership value for a usufructuary under 21, then a reduction of 10 points per ten-year band, down to 10 % from age 91. Bare ownership is the balance. For a usufruct granted for a fixed term, the value is 23 % of full ownership per ten-year period.

Reference: Légifrance, CGI article 669.

That scale is a tax tool, primarily to compute transfer duties. It does not claim to measure the economic value of a usufruct in an arm's length negotiation. In a genuine sale, the economic value of the usufruct depends on the company's actual distribution policy: a usufruct over shares that never distribute anything is worth very little, whatever the usufructuary's age. Conversely, the usufruct of shares in a regularly distributing company has substantial value.

In practice, in family transactions (a gift of the bare ownership in particular), the article 669 scale must be applied to compute the registration duties. In a sale to a third party or in litigation, an economic approach is often required, and it must then be capable of being defended.

The scenario is a classic one. A shareholder wants out, the articles provide for a buy-back, but nobody agrees on the price. Each side digs in and the company stalls.

Article 1843-4 of the Code civil may then govern how the price is set. It applies where the law refers to this article, or where the articles of association provide for the transfer of a shareholder's rights or their buy-back by the company without their value being either set or determinable. If the value is contested, it is fixed by an expert appointed either by the parties or, failing agreement between them, by the president of the judicial court or the commercial court, ruling under the expedited procedure on the merits (procédure accélérée au fond) with no appeal possible.

Three practical consequences, rarely anticipated:

• If the parties cannot agree on the choice of expert, the president of the court appoints one, and the shareholders then lose control over who sets their price.
• The process takes time and costs money, when an upfront agreement on method would have been cheaper.
• If the articles or any agreement binding the parties set out rules for determining the value, the expert is bound to apply them. Hence the importance of drafting that clause properly at incorporation, or correcting it while relations are still good.

Reference: Légifrance, Code civil article 1843-4.

Our consistent advice: commission an adversarial valuation or an amicable expert report BEFORE applying to the president of the court. Many files settle at that stage, because the parties discover that their gap comes down to three identifiable adjustments rather than a genuine disagreement on substance. We cover this more broadly in our article on business valuation in divorce and shareholder disputes.

The price of the shares is not the net price. Two tax layers overlap, one on the seller and one on the buyer.

Seller side: capital gain on the sale of securities#

The gain equals the sale price less the acquisition cost of the shares. It is subject to the flat tax of 31.4 %, made up of 12.8 % income tax and 18.6 % social levies.

That rate applies by default. Depending on the seller's situation (retirement, sale of a small business, reinvestment of the proceeds into a holding company), other regimes may exist. They do not apply automatically: they require prior analysis and, almost always, an operation structured BEFORE signing. The mechanics of a share sale are set out in our article on share transfers.

See also: Légifrance, CGI article 238 quindecies.

Buyer side: registration duties#

The buyer bears the registration duties provided for by article 726 of the CGI. The treatment differs radically according to the nature of the securities:

• Parts sociales (SARL, EURL, partnerships): 3 %, after an allowance of 23,000 EUR prorated to the percentage of shares transferred.
• Shares in a SAS or SA: 0.1 %.
• Property-rich companies: 5 %, whatever the form of the securities.

The gap between 3 % and 0.1 % is considerable on a sizeable deal. This is one reason why a change of corporate form is sometimes considered ahead of a sale, with all the caution that implies. The detailed calculation, including the prorating mechanism, is developed in our article on registration duties on transfers of shares.

Reference: Légifrance, CGI article 726.

One point we always flag: the tax authority can review the price. Article L. 17 of the Livre des procédures fiscales allows it to adjust where the price is insufficient for registration duty purposes. A price agreed "between ourselves", with no valuation support, exposes both parties. A reasoned valuation report helps justify the price agreed.

Take a services SARL with a minority shareholder exiting with 30 % of the capital.

Assumptions:

• Adjusted EBITDA: 400,000 EUR.
• Multiple applied: 5.5x, an assumption made for the purposes of the example and not a market average.
• Financial debt: 600,000 EUR. Available cash: 200,000 EUR. Net debt: 400,000 EUR.

Calculation:

• Enterprise value: 400,000 x 5.5 = 2,200,000 EUR.
• Equity value: 2,200,000 - 400,000 = 1,800,000 EUR.
• 30 % share: 540,000 EUR.
• Discount specific to the block: none is quantified here, as there is no scale; depending on where the multiple comes from and on the block's minority position, a discount may be justified and must be argued case by case (see above).
• Value of the 30 % block before any discount, used for the rest of the example: 540,000 EUR.

Tax, assuming an original acquisition cost of 60,000 EUR for the shares:

• Capital gain: 540,000 - 60,000 = 480,000 EUR.
• Flat tax at 31.4 %: 150,720 EUR. Net to the seller: 389,280 EUR.

Buyer side, registration duties under article 726:

• Prorated allowance: 23,000 x 30 % = 6,900 EUR.
• Taxable base: 540,000 - 6,900 = 533,100 EUR.
• Duty at 3 %: 15,993 EUR.

Total acquisition cost for the buyer: 555,993 EUR. Any shareholder current account held by the seller is added separately to that amount.

This example is illustrative. The multiple, the scope of net debt and the level of discount are the three variables that drive the whole discussion.

Across the firm's valuation and contribution-audit assignments, three observations recur with striking regularity.

First: the disagreement almost always concerns the bridge, not the method. Seller and buyer often agree on a multiple. They then diverge on what belongs in net debt, on the treatment of the current account, on normative working capital. Costing those items line by line, from the outset, saves time.

Second: a discount is better negotiated than endured. A minority holder who arrives without analysis has a high discount imposed without debate. A minority holder who arrives with a report documenting the approval clause, the distribution history and the presence or absence of a blocking minority negotiates on factual ground.

Third: the articles set the price. A valuation clause drafted hastily at incorporation becomes, ten years later, the source of a dispute. We recommend rereading it calmly, alongside the shareholders' agreement, at a time when nobody has an immediate interest in contesting it.

A final word on timing. A valuation carried out after signing serves no purpose other than documenting a dispute. It must come beforehand, while it can still influence the structure of the deal: form of the securities, scope transferred, treatment of the current account, tax calendar.