Under the new Article 1865-1 of the French Civil Code, the transfer must be documented by:
- a notarial deed;
- a deed countersigned by a lawyer;
- or, in limited cases, a private deed drafted by a legally authorized chartered accountant.
Failure to comply may result in the transfer being declared null. Tax registration also requires a copy of one of the legally permitted instruments.
For CEOs, CFOs, investors, and M&A teams, the practical consequence is clear:
The legal form of the transfer must now be addressed at the beginning of the transaction, not immediately before closing.
What Changed on June 27, 2026?
France introduced a new mandatory formality for transfers of shares and equity interests in real estate-rich legal entities.
Before the reform, these transactions could generally be documented through a standard private agreement, subject to applicable corporate approvals, transfer restrictions, and registration requirements.
The new Article 1865-1 of the French Civil Code changes that approach.
The intervention of an authorized professional is now a condition of the transfer’s validity.
The reform was introduced by Article 68 of French Law No. 2026-534 of June 25, 2026 on the fight against social and tax fraud.
Which Companies Are Covered?
The new rule applies to transfers involving a real estate-rich legal entity within the meaning of Article 726, I, 2° of the French General Tax Code.
In broad terms, the entity must:
- have shares that are not traded on a regulated market or multilateral trading facility;
- and have assets that are, or were during the year preceding the transfer, mainly composed of French real estate, rights in French real estate, or interests in other qualifying real estate-rich entities.
The rule can therefore apply to both:
- shares in civil real estate companies, including many French SCIs;
- and shares in commercial companies whose assets meet the statutory real estate test.
Certain collective investment vehicles covered by Article L. 214-1 of the French Monetary and Financial Code are expressly excluded.
What Form Must the Transfer Take?
A qualifying transfer must now be documented through one of three legally permitted forms.
1. A Notarial Deed
The parties may complete the transaction through an authentic deed executed before a notary.
2. A Deed Countersigned by a Lawyer
The transfer may also be documented through a private agreement countersigned by a lawyer under Article 1374 of the French Civil Code.
This is commonly referred to in France as an acte d’avocat.
3. A Deed Drafted by a Chartered Accountant
A chartered accountant may draft the private deed only where French law expressly authorizes that professional to provide the relevant legal service.
This option is therefore narrower than the notarial or lawyer-countersigned alternatives. It generally requires a direct connection with an existing accounting engagement.
The reform does not make a notary mandatory in every transaction.
It makes the intervention of an authorized professional mandatory.
Why Was the Reform Introduced?
The professionals preparing these deeds must comply with the applicable anti-money laundering and counter-terrorist financing obligations.
The reform therefore connects the validity of the transaction with enhanced professional oversight, including:
- identification of the parties;
- beneficial ownership checks;
- vigilance regarding the origin and structure of the transaction;
- and applicable reporting obligations.
The new formality is not merely an evidentiary requirement.
It is part of the French framework for preventing fraud and monitoring transactions involving real estate-rich structures.
What Are the Consequences of Non-Compliance?
The Transfer May Be Null
Article 1865-1 expressly provides that the required formality applies “under penalty of nullity.”
A transfer concluded without one of the authorized instruments is therefore exposed to invalidation.
This is significantly more serious than a simple administrative irregularity or late-filing penalty.
Tax Registration Cannot Proceed Normally
Under the new Article 635-0 A of the French General Tax Code, registration of the transfer is conditional on presenting a copy of:
- the notarial deed;
- the lawyer-countersigned deed;
- or the qualifying deed drafted by a chartered accountant.
An ordinary private agreement that does not comply with Article 1865-1 will therefore not satisfy the new registration requirement.
What Does This Change in Practice?
The reform affects the entire transaction timetable.
Previously, the parties could focus primarily on:
- valuation;
- financing;
- warranties;
- tax treatment;
- approvals;
- and negotiation of the purchase agreement.
The form of the final instrument could often be addressed later in the process.
That is no longer a safe approach.
The parties must now determine early whether the target qualifies as a real estate-rich entity and which authorized professional will prepare or countersign the transfer instrument.
This may affect:
- the signing and closing timetable;
- transaction costs;
- professional due diligence requirements;
- beneficial ownership documentation;
- conditions precedent;
- financing deadlines;
- and the registration process.
Practical Example
A buyer agrees to acquire all shares in a non-listed company whose principal asset is a French commercial property.
The price has been negotiated, financing has been approved, and the parties sign an ordinary private share purchase agreement without a notary, lawyer countersignature, or legally authorized accountant.
Even if the commercial terms are complete, the transaction may be null because the required statutory form was not respected.
The tax authorities may also refuse to register the transfer without the required instrument.
The quality of the negotiations cannot cure an invalid form.
What Should Companies Do Before Signing?
Companies involved in these transactions should add the following steps to their M&A and restructuring procedures.
Determine Whether the Target Is Real Estate-Rich
The analysis should cover the composition of the company’s assets at the time of the transaction and during the preceding year.
Indirect interests in other real estate-rich entities must also be considered.
Confirm Whether an Exclusion Applies
The parties should verify whether the target is an excluded collective investment vehicle or falls outside the statutory definition.
Select the Appropriate Instrument Early
The parties should decide whether the transaction will use:
- a notarial deed;
- a lawyer-countersigned agreement;
- or an accountant-drafted instrument where legally permitted.
Integrate the Professional Into the Timetable
The selected professional will need sufficient time to complete legal and anti-money laundering checks.
These requirements should be reflected in the signing and closing calendar.
Update Conditions Precedent and Closing Deliverables
Transaction documents should expressly address:
- the required form of the transfer;
- delivery of the compliant instrument;
- corporate approvals;
- registration documentation;
- and any professional verification requirements.
Frequently Asked Questions
Does every transfer of shares in a company owning real estate require a notarial deed?
No.
The transaction may also be documented through a deed countersigned by a lawyer or, in limited legally authorized cases, a deed drafted by a chartered accountant.
Does the rule apply only to French SCIs?
No.
It can apply to both civil and commercial legal entities, including companies limited by shares, provided they meet the statutory definition of a real estate-rich entity.
Does the rule apply to listed companies?
The Article 726 definition generally concerns entities whose shares are not traded on a regulated market or multilateral trading facility.
What is the sanction for using an ordinary private agreement?
The transfer may be declared null.
In addition, tax registration is conditional on producing one of the authorized instruments.
When did the new rule enter into force?
Article 1865-1 of the French Civil Code has been in force since June 27, 2026.
Are investment funds covered?
Transfers involving collective investment vehicles referred to in Article L. 214-1 of the French Monetary and Financial Code are expressly excluded from Article 1865-1.
Should the real estate test be assessed only on the signing date?
No.
Article 726 also looks at whether the entity’s assets were mainly composed of qualifying real estate assets during the year preceding the transfer.
Key Takeaways
The reform introduces four essential rules:
- Transfers of qualifying real estate-rich entities are now subject to a mandatory legal form.
- A notary is not the only available professional.
- Non-compliance exposes the transfer to nullity.
- The transaction cannot be registered for tax purposes without the required instrument.
The safest operational rule is straightforward:
Before negotiating the final closing process, determine whether the target is a real estate-rich entity and select the legally compliant form of transfer.
Conclusion
France’s new Article 1865-1 changes the execution of transactions involving real estate-rich companies.
The reform does not merely add another filing requirement.
It makes professional intervention a condition of validity.
For companies, investors, and finance teams, the practical priority is therefore to move the legal classification of the target to the beginning of the transaction.
A compliant instrument should not be treated as a final closing formality.
It is now part of the legal architecture of the deal.