The Learning Annex was a small company until I met Donald Trump. Now it is a large company because I mastered Donald Trump’s kick-ass attitude. About twen- ty-eight years ago, when I was a student taking film courses at The New School in New York City, I needed to make some money to support myself. So in 1979, at age twenty-six, I took the $5,000 I had gotten from my bar mitzvah and used it to start The Learning Annex. At first I thought of it as an informal school for experimental film instructors to share their knowledge with aspiring filmmakers. But my girl- friend at the time, a pottery teacher, talked me into expanding the curriculum and making a school for a different way of learning, a way for people to get a quick education about things they could not learn elsewhere. The Learning Annex was born.
In those early days I would dress up in a clown’s costume and stand on the streets of Manhattan handing out course catalogs. I would tell people to call the of- fice number in the catalog and say the clown told them to register to save five dol- lars on the class. Then I would run to the office and answer the calls. And to my ex- citement, loads of calls came in from people telling me a nice clown had told them about a discount. I would sign up each student for the class and send out the class confirmation letter. When there were no calls, I would look for new teachers to speak. I was a business of one and running it out of my $325-a-month studio apart- ment on the Upper West Side of Manhattan. My film career never took off, but The Learning Annex did, and I loved it. I real- ized I was a born promoter and I had found my passion. I changed the whole concept of continuing education to what I call “edu- tainment.” Everything is quick these days. Nobody has time for education. MTV and the Internet have created a generation of people who want everything to be fast-paced and entertaining. I decided to go after big-name personalities and cele- brities to teach the classes. I wanted the teachers to have big personalities and to be larger than life.
When we added the glamour of celebrity names to our roster, attendance sky- rocketed, and more and more luminaries were willing to say yes to my requests for them to teach. Sarah Jessica Parker, Harrison Ford, Richard Simmons, Henry Kissinger, P. Diddy, Suze Orman, Barbara Bush, Larry King, Desmond Tutu, Renee Zellweger, Deepak Chopra, and Rudy Giuliani have graced the podium of The Learning Annex, along with hundreds of others. How did I lasso these stars? Since I did not have a lot of money, I got celebri- ties by using a different appeal: guilt. I would say, “You’ve made it big. Why don’t you give back to society?” I remember movie mogul Harvey Weinstein. He was an extremely tough cookie to get. I whined and whined and whined at him, “You can give Learning Annex students an hour of your time for charity.” He finally did it, and he was amazing at telling the most fascinating insights on how to break into Hollywood. And he ended up speaking for several hours. Same with legendary record producer Clive Davis; not only did he listen to students’ demos, he signed someone right there during the class. For most of these luminaries the money was irrelevant anyway. Except for Donald Trump. He would not even take my calls. One day I called Trump’s office and was put through to his personal secretary Norma. I knew I could not get Trump’s attention using my usual pitch. He would not even talk to me. So I had to do something different to get his attention. I decided to pique his interest with money, which is extremely unusual for me. But I really wanted to get him, so I decided to go for it. I offered what to me was an enormous amount of money: $10,000. His secretary asked, “That’s it?” and dismissed my offer as if it were a cheap bottle of Chianti. She curtly added, “I don’t think so” and hung up the phone.
I took a lot of courage but a few days later, undaunted, I called Norma again and said, “I’ll give Mr. Trump twenty-five thousand dollars.” Norma said, “Nope. He’s not interested.” I was stunned. After that I realized I had been playing it safe. The following week I took an enormous risk; I offered $100,000. That was the most money I had ever offered a speaker, but it had no impact on Norma, who said with- out hesitation, “No way. Donald still couldn’t do it.” I sat back and thought really hard about what to do next. Should I drop the idea of having Donald Trump, or should I keep trying? I did not know what to do. Then I remembered what performance guru Tony Robbins had taught me, “If you want to make it big, you’ve got to push yourself beyond your limits. You’ve got to pump yourself up and get yourself into a hyper mental state. And you have to do this yourself. Nobody can do this for you.” I decided I wanted to be big. Donald Trump was the ultimate Mr. Big. We all have heroes, and Donald was mine. If I wanted to play in the same arena as him, I had to push myself to a new level. I pushed out my chest, took a deep breath, and gathered all the energy I could muster. Then I called Norma at Donald Trump’s office and offered one million dollars for Trump to speak for one hour at The Learning Annex. At the time, The Learning Annex had never grossed more than $5.5 million in an entire year. Think about it, I offered him a million dollars, and I was only bringing in $5.5 million a year. And I had rarely had a class of more than a few hundred students. How I was going to get my money back was beyond me at that moment. But I knew I had to do it. I just knew it. So I listened to my gut and made the call. And Norma said, “That’s very interesting. I’ll talk to Donald about it.”
I hung up the phone, went into the bathroom, and promptly threw up. Really. My mind was racing, and my heart was pounding. What had I done? If it did not work out, I could lose everything! In one minute I had gone to a whole new level in my life, and it was very uncomfortable. But it was also exhilarating! What I had just done was insane. But it felt great. In less than one hour, Donald called me back himself. When I picked up the phone I could hardly believe I was talking with Donald Trump. I thought maybe it was a friend goofing on me. But it was Donald. He said, “Bill, I like The Learning
Hollywood. And he ended up speaking for several hours. Same with legendary record producer Clive Davis; not only did he listen to students’ demos, he signed someone right there during the class. For most of these luminaries the money was irrelevant anyway.
Except for Donald Trump. He would not even take my calls. One day I called Trump’s office and was put through to his personal secretary Norma. I knew I could not get Trump’s attention using my usual pitch. He would not even talk to me. So I had to do something different to get his attention. I decided to pique his interest with money, which is extremely unusual for me. But I really wanted to get him, so I decided to go for it. I offered what to me was an enormous amount of money: $10,000. His secretary asked, That’s it?and dismissed my offer as if it were a cheap bottle of Chianti. She curtly added, I don’t think soand hung up the phone.
It took a lot of courage but a few days later, undaunted, I called Norma again and said, I’ll give Mr. Trump twenty-five thousand dollars.Norma said, Nope. He’s not interested.I was stunned. After that I realized I had been playing it safe. The following week I took an enormous risk; I offered $100,000. That was the most money I had ever offered a speaker, but it had no impact on Norma, who said without hesitation, No way. Donald still couldn’t do it.
I sat back and thought really hard about what to do next. Should I drop the idea of having Donald Trump, or should I keep trying? I did not know what to do. Then I remembered what performance guru Tony Robbins had taught me, “If you want to
make it big, you’ve got to push yourself beyond your limits. You’ve got to pump yourself up and get yourself into a hyper mental state. And you have to do this yourself. Nobody can do this for you.I decided I wanted to be big. Donald Trump was the ultimate Mr. Big. We all have heroes, and Donald was mine. If I wanted to play in the same arena as him, I had to push myself to a new level. I pushed out my chest, took a deep breath, and gathered all the energy I could muster. Then I called Norma at Donald Trump’s office and offered one million dollars for Trump to speak for one hour at The Learning Annex. At the time, The Learning Annex had never grossed more than $5.5 million in an entire year. Think about it, I offered him a million dollars, and I was only bringing in $5.5 million a year. And I had rarely had a class of more than a few hundred students. How I was going to get my money back was beyond me at that moment. But I knew I had to do it. I just knew it. So I listened to my gut and made the call. And Norma said, That’s very interesting. I’ll talk to Donald about it.”
I hung up the phone, went into the bathroom, and promptly threw up. Really. My mind was racing, and my heart was pounding. What had I done? If it did not work out, I could lose everything! In one minute I had gone to a whole new level in my life, and it was very uncomfortable. But it was also exhilarating! What I had just done was insane. But it felt great.
In less than one hour, Donald called me back himself. When I picked up the phone I could hardly believe I was talking with Donald Trump. I thought maybe it was a friend goofing on me. But it was Donald. He said, “Bill, I like The Learning
Annex, and you made me a very nice offer. Let me ask you, how many people are you going to get for this event?” Up until then most of our classes had between 500 and 700 people, and the biggest class had been for a psychic. We had never had more than several hundred students for any of our events. So I told him, “I’ll get one thousand people.” In my mind, 1,000 people was a huge number of peo- ple. Trump retorted, “I’ll do it if you can promise me you’ll get ten thousand peo- ple.” Ten thousand people! I had never imagined getting 10,000 people in my wildest dreams. But I boldly said, “Yes. I’ll get ten thousand people. No problem.” Trump said, “Great. My lawyer will send over the paperwork.” And that was it. The deal was done. By saying “yes” I had made a solid commitment to living very big, bigger than ever before. That moment changed my life. Donald Trump took me to a whole new level. I started doing things I had never done before. I started thinking on a much larger scale. I had to get 10,000 people to come see Donald Trump. And guess what? Everyone wanted to learn from Donald, and the registrations started flying in.
That is how The Learning Annex Wealth Expo came about. As it turned out, I got much more than the 10,000 people I promised Trump. Over 31,500 people at- tended our first Learning Annex Wealth Expo in 2004. It was an amazing turnout. And as a result, it was actually very easy to pay Donald Trump his fee. Trump knew all along that I could do it. I thank him for challenging me to change the way I think. The experience proved to me beyond any doubt that when you think big, big things come to you. My company has grown over 400 percent every year since I met Donald Trump, zooming from a small company earning $5.5 million in sales to a big company making $102 million last year. The Learning Annex was named one of Inc. magazine’s fastest growing companies two years in a row. All because I learned the Think BIG and Kick Ass principles that you will read about in this book. Working with Donald Trump has completely changed the way I think. I had heard the term “think big,” but I never really understood it. Thinking big is a way of life for Donald Trump. I learned from him that to really think big you must discard the comforts of your own insecurities. I learned that to be successful you must never give up. Every failure is a step on the way to success. Donald Trump has a can-do, take-no-prisoners attitude. Be your own person. Demand what you want in life. Do not let other people run your life. Do not let people push you around. If someone crosses you, do not lie down and take it; fight back, kick ass, and get even. Make your own rules, and do not care what other people think. That is what Donald Trump is all about. Through his attitude and his example Donald Trump has taught me how to truly think big. And now I live a life of much bigger energy, much bigger goals, and much bigger income. My new attitude has boosted my self-confidence enormously. I have no trouble making big plans and going after top-name celebrities, whether it is Warren Buffett, Rupert Murdoch, or even President Clinton. Nothing scares me anymore. My busi- ness life and my personal life have been transformed by my friendship with Donald Trump. I am a much better man who believes in himself. I have become a
millionaire many times over. I value myself more, and that has filtered into my per- sonal life as well. I am a better husband to my wife and a better father to my chil- dren. My wife loves my new attitude, and my kids respect the new me. Their lives have also been transformed. After seeing crowds of 50,000 people, my son Dylan has become more interested in business. After listening to Donald Trump, my daughters Ediva and Vera have pursued their lives with more passion. My wife, Debbie, admires the risks I take and supports me in my business ventures. If you are a small business owner, it is very important that you get support from your spouse. Just knowing that my wife is behind me helps me when I get scared. Run- ning a small business has risks; it is a battle, and it is important that your spouse and children are with you in this battle. I was working 24/7 in the days leading up to our first Wealth Expo in New York City in 2004. At 4 a.m. the morning of the expo, I was in a 24-hour deli nearby the Jacob K. Javits Convention Center, buying a birthday cake for one of the guys on the team. He was giving up his birthday to do the expo, so that was the least I could do. I got a call from Harry Javer, who was running the expo. He said “Get your ass down here now. We have a major problem. We have lines of people block- ing the doors. The Javits Center is going insane. They have never seen lines like this before, and at 4 a.m.!” When we did that first mega-expo in 2004 we had no idea what we were getting into. If we had told somebody that we were going to attract 30,000-plus people at our first show, they would have said it was impossible. As a matter of fact, most “experts” said we would not even get 5,000 people. Since we did not have expe- rience with huge shows, we did not know any better. That first morning the lines to get into the Javits Center were eight blocks long. We had spent a huge amount of money promoting the event. Everybody wanted to meet Donald and learn his se- crets. The promotion paid off: the crowds came. It was an entrepreneur’s dream come true. I had bet big, and I won. I was now a big believer in Donald’s Think Big strategies.
Evolution of world trade
1- In 2001, the growth of the economy in terms of gross domestic product slowed sharply in each of the three main economic regions, the United States, the European Union and Japan. Economic growth reached a little over 1%, against 4% in 2000. .
2-The impact on developing countries has been much more pronounced than in previous downturns of the 1990s. After reaching 5.4% in 2000, their economic growth was only 2.1% in 2001. Only China and India, two large, relatively closed economies, have remained more or less immune to the depressing influence of global markets.
3- Due to this economic environment, the evolution of world merchandise trade has experienced its greatest decline since the second oil crisis of the early 1980s. In the first half of 2002, volume has gradually recovered, but the context remains the same. hesitant global growth1. While the value of imports from the European Union and the United States decreased by 6% compared to the same period in 2001, in Japan and Latin America its decrease exceeded 10% 2. Conversely, in China and Russia imports increased by 10% and 7% respectively. Thanks to an increase in demand, especially in North America, in 2002 the volume of world merchandise trade is expected to increase by 1% compared to the previous year. The growth in the value of exports will be slightly higher following a general appreciation of the dollar forecast during the year.
4 – According to estimates, the volume of world merchandise exports decreased by 1% in 2001, while in 2000 it reached 11%, which is the highest growth rate in the last decade3. Production and trade suffered a sharp slowdown because of a general stagnation of investments and a slow growth in final consumption (2-2.5%), which was also satisfied by previously accumulated stocks.
5- The abrupt interruption of investment in information technology equipment in OECD countries, coupled with the slower pace of consumption of this type of product, has led to a deterioration of international trade in office equipment and in particular the exports of Asian countries specializing in the production of this category of goods. In 2001, the value of world merchandise exports fell 4% to $ 6 billion, the largest decline since 1982. In all economic regions, a decline in export revenues occurred, except in the United States. economies in transition that have seen increased revenues from the sale of fuels. The fall in the value of exports was recorded for the three main product groups: agricultural products (-1%), mining products (-8%) and manufactured goods (-4%).
6 – The 1% trade services trade inflection affected all categories of services and major regions.
7 - With a participation of 1.4% of the value of world merchandise trade in 2001, Switzerland maintained its rank as a merchandise exporting and importing country (20th, respectively 17th) and commercial services (17th, respectively 27th). The evolution of the balance of goods improved thanks to an increase in the value of exports of 4% to 132 billion francs, higher than that of imports by 1% to 130 billion francs4.
8 – For Switzerland, the bulk of international merchandise trade takes place with other industrialized countries: 78% of the value of exports against 88% for imports.In 2001, goods traffic to developing and transition countries5 reached worth CHF 29 billion, or 22% of total exports. During 2001, this position deteriorated especially in relation to the Asian emerging countries, Argentina, Turkey and South Africa. Imports from developing countries reached 15 billion francs, equivalent to 11.5% of the total. Despite their overall stability, imports were characterized by a sharp drop in flows from Asian countries. This trend continued during the first half of 20026, accompanied by a decrease in the value of trade with the industrialized countries due to negative volume effects following the general appreciation of the Swiss franc. The branches affected by this contraction are the electronics industry and machinery, while the evolution of exports of the chemical and pharmaceutical branches remains positive.
International Trade Section
When the internal market becomes too narrow, it is time to consider an international expansion strategy. This is an opportunity for any entrepreneur seeking to increase his growth potential. The basics to know before tackling an international trading strategy.
The challenges of an internationalization strategy
Like any diversification, it is advisable to act with method and rigor to succeed its project. The first step is to build a relevant roadmap: definition of goals and action plans. This amounts to formalizing the “why”, the “how”, the “how”, the “who” and the “when”. Do not forget to take into account the intercultural aspects. A key success factor.
Do not hesitate to be helped by consular agencies, very knowledgeable of winning export strategies. By their knowledge of the countries, they also offer a significant support to lead its export diagnosis. In short, we must capitalize on their experience.
International trade – must we start?
Qualitative and quantitative benefits
A company that wants to expand abroad sees and prepares its strategy for the long term. The benefits are certain, not just to enjoy a low labor cost. This is:
- Increase profits and sales by opening up its products and services to new markets and therefore to new buyers.
- Optimize products, where the original market is saturated or not very beneficial.
- Expand the product portfolio and thus meet an ever more demanding clientele.
- Developing its technologies through the transmission of know-how and knowledge
But bigger and more complicated risks to evaluate
International trade also relies heavily on risk. Hence the preparation of a “well-crafted” strategy. Standards and customs vary greatly from country to country and the control of these aspects is delicate. This is why these threats are now appreciated by international rating agencies.
A company must collect as much information as possible, assess all possible risks and take out insurance accordingly:
|Foreign exchange |
|Fluctuating foreign exchange rate||Include an exchange policy|
|Credit risk||Possible loss on a claim||Request a full payment on the order, Payment on an open account, insurance …|
|Risks related to|
|No protection from a country to a |
|Modify, improve the offer to stay competitive|
|Transport risks||Losses, theft, contamination, |
|Risks related to|
|Country-specific values||Vigilance and control|
Theory and practice are two very different things. That’s why, to grow abroad, a company must ask the right questions and lay out the information available. The Business Plan is an excellent support for example. By completing it, the company will gather all the necessary information and will be able to adopt the best strategy.
How to enter international trade in 6 key steps
After performing an export diagnosis to ensure its potential and ability to carry out such a strategy, here are the steps to follow. It should be noted that most of the steps are part of a market study.
1- Choose the country and the right product
This is to identify his target. Internet is a powerful tool available to all. In some research, the company will be able to identify the demographic social criteria of its target and the use of the product made in the targeted country.
- Collect information on social networks, opinions in surveys, market research
- Check with public bodies such as the Chamber of Commerce, the Regional Directorate of Foreign Trade or embassies …
2- Go around the regulations
These vary greatly from one country to another and especially from one continent to another. And even if the International Chamber of Commerce and / or Free Trade Zones, which we have discussed above, largely regulate trade, the states remain masters of their territory. Some products may even be banned for import or export.
3- Adapt the product to the country
How will the product be perceived? Seen? Judged? Not only the product must be adapted, but also its:
- and price
4- Adapt logistics to international trade
Once the perfect market is found, that is to say, not very competitive and where the products seem attractive to consumers, the company will have to organize to gain a foothold. Logistics and all the insurance that surrounds it will be decisive. For this, the company must:
- Find suppliers, collaborators in accordance with its values and requirements.
- Train your teams internationally.
- Clear conditions, contracts, payment methods and ensure products and services to prevent all risks.
- Organize transport according to the possible barriers to the entry of the country and according to the terms of the International Chamber of Commerce
5- Promote your products and services in a foreign market
Communication methods are specific to each culture and country. It will be necessary here to establish the prospecting channel which will be the most interesting to invest to make known his brand and develop the image of his company in the target country:
- Traditional channels: associations, communities, trade shows, trade fairs …
- Economic missions.
- Digital prospecting: social networks, influencers or Key Opinion Leaders, online advertising.
6- Customize the marketing strategy at the market
Once all the conditions have been defined, think about the communication around the product:
- Provide a website in the language of the target country.
- Choose the currency to display. If it is different, the company should consider offering at least one international payment method such as PayPal.
- Do not forget the SEO (the natural search engines) and the UX (the user interface). Whether it is to act on the ergonomics of the web page or the ergonomics of the keywords, both are not to be neglected.
International trade has always existed more or less. In any case, it goes back to time immemorial. However, it is on this last century that it will have taken all its magnitude. Today we are even talking about a global economy. Indeed, each international event will affect prices, products, demand and the market. In addition to being attentive to where, what and how, you will always have to keep an eye on who and what. A political event, an economic crisis in a country or even a world cup in a country can change the game.
Assignment and sale of a goodwill: what is the procedure to follow?
When you sell a business, and especially a business, a portion of what is sold, and which often represents the largest portion that can be valued and valued, is called goodwill. The sale or sale of a business is not as simple as it seems at first glance. A goodwill is a collection of tangible and intangible items relating to the operation of a commercial or industrial activity.
While it is relatively easy to count and evaluate material / bodily elements, intangibles are more difficult to assess.
In addition, the sale of a business is subject to legal obligations, particularly regarding the form: mandatory information, registration formalities (changed by Macron law), payment of transfer duties (or registration fees) .
These formalities are intended to protect the creditors of the seller, but also the buyer in case negative elements have been hidden. The bill of sale itself is either made by a professional (notary for example) or under private seal.
1- The composition of the business
2- Information obligations before the sale of the business
3- The sales agreement and the deed of sale of the business
4- And after the sale of the business?
1-THE COMPOSITION OF THE TRADE FUND
Body elements are material elements such as furniture, tools, goods, material stock, etc.
Intangible items are immaterial items such as clientele – essential element of the fund -, leasehold right, trademark, trade name, relations with suppliers or partners, employee employment contracts, patents and property rights intellectual property, the website, the rental agreement, etc.
Often related to each other, these elements constitute the value of the business.
Attention, because there are some elements that one might think to be part of the goodwill, and which in reality, are not part of what is transmitted during a transfer of business.
It’s about :
debts and debts (except in the case of tax solidarity and if the buyer does not take into account some of his obligations)
contracts that are not necessarily transferable
accounting documents (available to the buyer for 3 years)
the terrace right of a restaurant or a drinking establishment (this right is given in a personal capacity and the new operator must therefore request a new authorization.
2-THE INFORMATION OBLIGATIONS BEFORE THE TRANSFER OF THE TRADE FUND
Verification of Capacity, Authority and Consent of the Parties
Both the acquisition and the transfer of a business, they assume for the intervening parties to have the legal capacity and the power to proceed.
Thus, in the case of a protected natural person, it will be necessary to obtain the authorization of the family council or guardianship judge, as provided for in Articles 389-5, 457 and 495 of the Civil Code.
The question arises also in matrimonial terms, each spouse can not, one without the other, to transfer the goodwill assigned to the community. They can not thus, without the agreement of the other spouse, collect the capital resulting from such operations (Article 1424 of the Civil Code).
In addition, the operation of a goodwill makes the acquirer a merchant, which implies that he has the capacity to exercise a commercial profession or is not subject to any prohibition.
Finally, as is the case in any contract, the parties must have consented to the thing (the fund) and the sale / acquisition price; this consent must be free from all vice (fraud, error, violence, see below for consequences).
If the company has less than 249 employees, they must be informed in case of sale of the business (or sale of the company if the sale gives the majority of the decision-making power) and this at least 2 months before the conclusion of the sales contract.
Employees can then make a proposal to acquire the business (or in the case of a sale an offer to buy shares, shares or a takeover offer of the company) but they also have an obligation of discretion.
There is an obligation to inform the transfer of the business, which must respect a certain formalism. Employees must be informed by a means that makes certain that they have taken knowledge of the transfer of the business at the right date (for example by an information meeting with signature of a register of presence or via a display with signature dated from a register proving that they were aware of this posting or by e-mail and certified date of receipt of this e-mail or by registered letter with acknowledgment of receipt or by bailiff’s act, etc.).
If the company has more than 250 employees, it is not affected by this information obligation. This obligation of information does not concern the transfer of the business to a spouse, ascendant or descendant.
The sale can take place between 2 months and 2 years and 2 months after the information of the employees. Then, it is necessary to inform again the employees if the project of transfer of the goodwill is always on the agenda.
In case of non-information of the employees, a fine (2% of the price of the transfer) is foreseen in case of procedure of action in responsibility engaged. However, the sale of the business can not be called into question.
List the elements of the business included
Recall that the clientele is the essential and essential element of the business, without which the qualification of goodwill can not be retained (the absence of customers entails for the parties to see requalify the transfer of goodwill in simple transfer commercial lease).
– 3The importance of listing the components of the business
It is crucial for the parties to proceed with the list, also known as the inventory of tangible items and incorporated into the fund. Any lack of precision will give the judges the free appreciation of the elements making up the fund and possibly modify the inventory in case of disagreement of the parties.
As such, the Court of Cassation considers that all the elements essential to the existence of a customer base form an integral part of the sale; in this, include the license to operate a drinking establishment, the trade name, the sign, the right to lease.
1- Items included in the surrendered fund
Even though the assignment agreement may not provide for this, a number of items are transferred to the purchaser:
The right to lease, subject to the status of commercial leases;
Current employment contracts;
Publishing contracts (in the case of a publisher’s business).
1- Items excluded from the surrendered fund
On the other hand, as stated above, not all elements of the business are included; however, it is permissible for the parties to include them conventionally.
Among the items generally excluded, unless otherwise agreed, are the receivables and debts, the transferor’s lawsuits relating to the transferred clientele, real estate, contracts in progress with certain distributors or suppliers.
Right of first refusal of the municipality
If the transferred business is located within the perimeter of the shops and local crafts, the municipality may pre-empt it. This means that it will be a priority to buy it and then return it to a selected trader or craftsman.
When the goodwill is exercised in an area likely to be affected by this right of pre-emption, the seller must make a declaration of assignment to the mayor.
If he wishes, the mayor of the municipality then has 2 months to exercise the right of pre-emption on behalf of the municipality.
3-THE ASSIGNMENT PROPERLY SAID: COMPROMISE OF SALE AND ACT OF SALE OF A TRADE FUND
The compromise of sale or promise of sale
It is customary, because of certain events not realized (often the granting of a bank loan) the day the parties have agreed in principle, to precede the act of transfer of a promise of assignment.
We speak of a synallagmatic promise of sale (or compromise of sale), when both parties agree, the one – the transferor – to transfer the good, the other – the assignee – to acquire it.
The latter must, for sale, contain the statements required for the sale itself. The two parties must therefore have agreed on the subject (the fund and what it contains) as well as the price.
The conditions precedent to be fulfilled for the sale to be perfect will thus be mentioned precisely so as not to suffer from any dispute or possible interpretation.
Some promises of sale contain a clause of withdrawal, providing for the payment of an indemnity of 10% of the sale price by the defaulting party to the other party.
The deed of sale
The deed of sale of a business is an almost classic sales contract which must mention certain information relating to the fund and some of which are of public order and listed in Article L141-1 of the Commercial Code:
the sale price of the business
the name of the previous seller with the date and nature of its act of acquisition (origin of ownership) and the price of that acquisition for intangibles, goods and equipment,
status of privileges and pledges
sales and operating results for the last 3 years (or since the start of operations if the holding period is less than 3 years)
the elements of the lease (date, duration, name and address of the lessor and the transferor)
If these items are not indicated in the deed of sale, the latter can be canceled at the request of the buyer.
In case of inaccuracy of one of these mandatory information, the nullity can not be pronounced, but a decrease in the price of the transfer of the goodwill can be carried out if this inaccuracy caused
The deed of sale thus requires the presence of a writing in view:
to protect the parties and in particular the creditors of the assignor and also
to constitute intangible proof of the presence of a transfer of goodwill.
The deed of assignment obviously ensures the two parties certain things and in particular, for the buyer, that the seller guarantees him:
that there are no hidden defects. Example: sale of a drinking establishment located in a prohibited perimeter; a non-warranty clause for hidden defects may, however, be provided, but it must be express and will not be valid if the seller is in bad faith;
that there is no risk of eviction of third parties
As said in the introduction, this act can be done under private signature or under the aegis of a professional (notary). In the latter case, we speak of an authentic act.
4-AFTER THE SALE OF THE TRADE FUND
If the deed of assignment is a private deed, the purchaser of the business must register the deed of assignment with the tax authorities of the place where the fund is located in the month following its signature (the law Macron waives this period authentic acts because go through a professional guarantees that the act will be recorded).
It is through this registration that the buyer will know the fees to pay. It is usually the buyer who will pay but the deed of assignment may provide for a sharing of costs or payment by the seller.
Publication of the sale and opposition of the creditors
Before the entry into force of the Macron law of August 6, 2015, the transfer of a business should be published both in the BODACC (Official Bulletin of civil and commercial ads) but also in a newspaper of legal announcements in a period of 15 days. With the Macron law, the requirement to publish in a newspaper of legal announcements has disappeared.
Advertising is only done via BODACC. The period of opposability by the creditors is always 10 days.
If the assignment is made by a deed, BODACC’s advertisement of the registration of the deed of assignment is not mandatory.
Article L141-12 of the Commercial Code provides that the sale is “published at the purchaser’s request in the form of an extract or notice in the Official Bulletin of Civil and Commercial Announcements”. This publication must occur within 15 days of its closing date.
This same publication will open for the benefit of the assignor’s creditors the seller’s right to oppose the settlement of the assignment for a period of 10 days.
Indeed, it is only in the absence of opposition from the creditors that the purchaser may pay the price of the assignment to the seller. It will also be necessary to have disinterested the Tax Administration as well as any social organizations.
The purchaser who would pay the seller without having published the sale or without having waited for the expiry of the 10-day period is not released in respect of them (Article L141-17 of the Commercial Code), and this, not important, that the said creditors have or have not opposed the payment of the price (Com 24 May 2005).
In case of opposition, the seller has an appeal. In the absence of opposition, the purchaser may directly pay the price to the seller.
In practice, the price of the business is retained between three months and five and a half months to complete the formalities and to settle the claims of potential creditors and taxes. For this, we can appoint a receiver (notary or lawyer) who keeps the money in a neutral way.
This receiver is usually the agent of the purchaser (unless another option is decided) and the cost of the escrow is borne by the purchaser. Note that we can also sell only a portion of goodwill, so we talk about partial sale of business.
Procedures of the transferor
The transferor must close his accounts with several tax declarations and via the clerk of the commercial court, ask that the sale of the business be published in Bodacc (within 30 days of signing the deed of sale) with the registration of the deed of sale, the names and addresses of the owners (old and new), the nature and price of the fund.
If the transferor stops his activity, then he must think about asking for his cancellation from the Center of Formalities of Enterprises (CFE), which is the Chamber of Commerce and Companies for traders or the Chamber of Crafts for craftsmen.
The seller must also declare to the tax office the sale of the business (declaration of the actual profit of the goodwill on the day of the sale accompanied by a summary of the profit and loss account) within 60 days from the publication to the BODACC .
Registration with the Registry of Trade and Companies by the transferee
In the case of a first commercial activity, the purchaser, if he has never been a merchant, must apply for registration with the RCS; or, if it already is, apply for a secondary, complementary or amending registration. It may be, in the case of the seller who would like to cease his activity, to request his removal from the RCS.
If he already has an activity, the buyer must start a secondary establishment or, if he starts from scratch, found a company.
Formalities relating to patents, trademarks and models
If the business sold includes patents, trademarks, designs and models, the subsequent publicity formalities and specific to the transfer of these goods must be completed.
Establishment of an inventory
When taking possession of the premises by the tenant, the transfer of the right to lease included in the fund must be the subject of an inventory (Article L 145-40-1 of the Commercial Code).
Given the complexity of the procedure, it is advisable to be accompanied by a specialist. This one will know your needs and will write an act of transfer perfectly secure and adapted to your situation, while protecting your rights.
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