Is France to miss the transmission of its family businesses? If they represent 65 % of GDP and 69 % of jobs, according to the Dauphine Chair “family businesses and long -term investment”, only 15 to 20 % of them are taken up by a family member. A figure much lower than that of Germany (51 %), Spain or Italy (70 %) or even Scandinavian countries (80 %). A weakness that Philippe Grodner, president of FBN France (for Family Business Network, a global network of family businesses) describes as “French evil”.
71 % of French companies are family
Representing nearly 71 % of French companies, excluding VSEs, family businesses are characterized by capital ownership of at least 50 % for SMEs and 20 to 30 % for large listed companies, as well as in the involvement of the family in governance – to management or another level of management – ensuring the continuity of family values. “The company can have institutional or financial investors in its capital, but its ultimate control must be provided by the family or by a family group,” comments Philippe Grodner.
Boomers faced with their responsibilities
With demographic aging, in 2023, 25 % of the leaders of SMEs and Family ETIs were over 60, according to Bpifrance and the FBN. And within ten years, one in two family business will be transmitted – around 700,000 companies, a large majority of which are family. A key issue, however, when you know that a poorly anticipated transmission can lead to cessation of activity, with major consequences on employment, know-how, and territorial anchoring.
Family companies, which are highly anchored in their territory, play an essential role in the employment and development of their economic pool. “They have a more important social impact in the sense that they promote local jobs. Extremely diffuse in the entire French territory, they have a strong territorial attachment and participate in the social bond and the economy in our territories,” confirms Alain Moy, president of the ECOWF, the Circle of Children leaders of family businesses (national network which helps successors in the resumption of the family business). “If family transmission does not take place, this can lead to the destruction of jobs and vitality in our regions,” concludes Philippe Grodner.
“Family companies are not thought to be sold. They have the ability to project themselves into the future and reason in generation, not in quarter.”
Other advantages of these companies: carried by strong values, a long -term vision and a clear orientation towards performance, they display longevity and resilience superior to the others. “Their average lifespan is 60 years -three times more than other types of businesses -, and their growth rate is higher: 5.2 % against 4 %,” reveals Philippe Grodner. A performance he explains by their logic of sustainability: “Family companies are not thought of to be sold. They have the ability to project themselves into the future and reason in generation, and not in quarter.”
Five to ten years of anticipation
If 92 % of managers want the business to remain family, paradoxically, few of them put things in place to facilitate this transmission. However, the key lies in anticipation, recall Bpifrance and the FBN, which believe that the average duration of an intra -family transmission process is five to ten years. “It is never too early to think about transmission,” says Philippe Grodner. Training buyers and securing the passage of relays therefore becomes a national emergency.
But the transmission often remains hampered by taboos and a lack of dialogue. The assignor, who was under the spotlight for 10, 20, 30 or 40 years and whose charisma is no doubt, can sometimes believe is unbeatable. “Citing his business then amounts to living a form of small death for him,” said Johan Gaulin, associate lawyer, head of the family business market in France at Ey. “The latter living longer and longer, they tend to see themselves as indestructibles who will stay forever and hang on,” continues Philippe Grodner. The FBN militates in this direction to ensure that the agenda of their board of directors is registered the way in which the subject will be addressed as soon as the leader reaches 50 years.
47 %
For the time being, less than half (47 %) of family business leaders aged 60 to 69 would have formalized a succession plan (36 % for those over 70). “Taken by the daily life, they delay the moment to talk about it, often out of modesty or for fear of facing their own end,” explains Alain Moy who deplores that France inherited “40 years of an antifamilial spirit and hostile to heritage transmission”. This is confirmed by Romain Chevillard, founding partner of Roch Conseil, specialist in family businesses: “We must exchange between the two generations, talk about the family business, explain what we do. Unfortunately, it is a culture that we do not have in France with a lot of unsaid”, he regrets.
Favorable tax provisions
Fortunately, for the past ten years, “the trend has been reversed, and the family business now has increased recognition as well as a more favorable framework”, recognizes Alain Moy. Because the other large taboo to rise remains the economic brake: a successor child does not necessarily have financial means to buy the company alone.
Between the dismemberment of securities which makes it possible to transmit without immediately dispossessing and the Dutreil pact which makes it possible to reduce inheritance tax and to benefit from a reduction of 75 % during the transmission of business, the legal and tax tools facilitating the recovery have been considerably strengthened over the years, recognizes Romain Chevillard.
The Dutreil pact is still too little known and attacked
However, these mechanisms are still too little known: 80 % of companies ignore the existence of the Dutreil pact and do not benefit from it. Above all, this tax system is today the subject of recurring criticism and regular questioning, especially on the part of certain political parties.
“The Dutreil law, which aims to maintain the sustainability of family businesses and greatly helps them to be transmitted, is poorly understood and regularly attacked,” deplores Philippe Grodner. For him, it is however imperative to preserve this transmission tool. “Otherwise, successors will not be able to pay inheritance rights, and there are a risk of irreversibly destroying millions of jobs. French companies will then become targets for financial or institutional capitalism, delivered to the ambitions of foreign groups,” he warned.