By Rémi Dudreuil, Managing Director of Cabinet Licence 4
Updated on
The five-year rule
Article L3333-1 of the French Public Health Code is unambiguous: a 3rd or 4th-category establishment serving drinks for consumption on the premises that has ceased to exist for more than five years is considered closed down. Its licence can no longer be passed on: neither sold nor transferred.
The rule applies to the Licence IV and the Licence III alike. And there is no way back: once the deadline has passed, the licence is gone, whatever it was worth the day before.
Calculate your deadline
The period runs from the last time the premises were operated: the last month they were open and serving drinks. Enter that month to find out your deadline.
Until when can you sell?
Indicative calculation. Your expert checks your licence's exact situation: date it was last operated, declarations and any proceedings under way.
When the period is extended or suspended
Compulsory liquidation
If the business is in compulsory liquidation, the five-year period is extended, where applicable, until the liquidation is closed. The licence is then sold by the liquidator.
Temporary closure
During a temporary closure ordered by a court or an administrative authority, the five-year period is suspended for the duration of that closure.
Permanent closure by court order
When a court orders the permanent closure of the premises, the licence is cancelled: it can no longer be sold.
How long does it take to sell?
Signing is not enough: for the sale to go through, the buyer must also have time to file their declaration at the town hall and, if the licence moves to another town, obtain the transfer authorisation, before the deadline. The closer the deadline, the more buyers hesitate.
| Time left | Our advice |
|---|---|
| More than two years | You have time: a sale to our buyers lets you aim for the best price. |
| Between one and two years | Put the licence up for sale without delay, and compare with our buyback offer. |
| Less than a year | A buyback by the firm secures the sale: a firm offer, signature and payment within 48 hours. |
Proving the date the licence was last operated
The date of last operation is shown with the business's own documents:
- annual accounts and turnover or VAT returns;
- invoices from drinks suppliers;
- the licence's declaration receipt and, where applicable, the company's Kbis extract.
Your expert checks this date with you during the valuation, before any sale.
A buyback, the solution when time is short
As long as your licence is valid, the firm can buy it back: a firm offer from the valuation, signature and payment within 48 hours, with no transfer condition. You no longer have to watch the deadline.