The three questions to settle before looking at the tools
What are you trying to achieve? Retaining three key managers, giving all employees a share in the results, or preparing a buyout of the company by its team. These are three unrelated projects, and no scheme serves all three properly.
What is your legal form? A SARL can neither issue BSPCE nor award free shares. Converting to an SAS then becomes a prerequisite, with its own consequences for governance and for the owner-manager's status.
When and how will the employee exit? This is the question almost nobody asks at the outset, and the one that determines whether the scheme will have any real effect. A share with no prospect of being sold is an abstract promise.
BSPCE: often cited, rarely accessible
The founder's share warrant (BSPCE) gives the employee the right to buy shares at a price fixed in advance. If the value rises, they exercise and pocket the difference. If it falls, they do not exercise and lose nothing.
It is an excellent tool, and it is almost always out of reach for the SMEs we meet. The eligibility conditions laid down by article 163 bis G of the French General Tax Code explicitly target young companies: a joint-stock form, an unlisted company or one with a limited market capitalisation, liability to corporation tax in France, significant ownership by individuals, and above all an age condition that excludes companies founded long ago.
An industrial company founded in 1994 is not eligible, whatever its size or profitability. That is worth knowing before spending fees on the subject.
When it applies. A recently created subsidiary, a company born of a recent restructuring, a new activity housed in an ad hoc structure. In these cases, the ratio between the effect obtained and the cost to the company remains the best on the market.
Free shares: the reference tool for established SMEs
A free share award consists of giving shares, with no payment from the employee, at the end of a vesting period. A holding period may follow. The decision rests with the extraordinary general meeting, which sets a ceiling and delegates to management.
What makes it the most widely used scheme in SMEs. No age condition on the company. No financial effort required from the employee, which matters a great deal in a team where pay is close to the median wage. Real flexibility on the award criteria, which can be individual, collective or tied to objectives.
What to look at closely. The overall ceiling expressed as a percentage of the capital, set by the Commercial Code and which varies depending on whether the award benefits a few people or all employees. The employer contribution, from which some SMEs can be exempted under conditions, notably where no dividends are paid. And the dilution, which is real and immediate for the existing shareholders.
It is the scheme we see working best when the aim is to build, over five to seven years, a core of manager-shareholders capable of taking over the company.
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Talk to an advisor →The PEE and the PPVE: two collective logics
The company savings plan (PEE) lets employees buy shares in their company at a discount, topped up by an employer matching contribution. The sums are locked in for five years, except in the early-release cases provided for by regulation.
Its strength is its universal nature: all employees have access to it after a short period of service, including part-time employees and apprentices. It is the only scheme that genuinely allows you to say that the company belongs a little to everyone without the sentence being a figure of speech.
Its limit lies in the valuation mechanics. In an unlisted company, an enterprise value has to be established at each subscription round and each buyback. This valuation must be methodical, documented and stable over time. A value that swings by 40% from one year to the next without explanation destroys trust more surely than having no scheme at all.
The PPVE, the company value-sharing plan created by the law of 29 November 2023, occupies a particular place. It does not hand out shares. It pays employees a bonus if the value of the company has risen over a three-year period.
The appeal is obvious for an owner-manager who wants to involve their teams in value creation without changing the shareholding, without dilution and without having to manage a wider governance. The plan benefits all employees meeting a length-of-service condition, and the bonus is capped.
Its limit is the mirror image of its advantage. The employee receives a sum; they do not become a shareholder. The effect on day-to-day behaviour owes a great deal to the status of partner and not only to the financial gain. It is a good sharing tool and a poor transfer tool.
How to decide in practice
| Your objective | Most suitable scheme |
|---|---|
| Retain 3 to 8 key managers | Free shares, with presence and performance conditions |
| Give all employees a share in the results | Profit-sharing and incentive payments paid into a PEE, with matching contribution |
| Share value without opening up the capital | PPVE |
| Prepare a buyout by the team | Free shares for the management team, then a buyout holding with an investor |
| Recent structure or new subsidiary | BSPCE, if the eligibility conditions are met |
These schemes can be combined. A frequent configuration in the SMEs we support pairs a PEE open to all and free shares for the management team, with a shareholders' agreement that organises everyone's exit.
The real difficulty is not choosing the tool. It is building the agreement: who can sell, to whom, at what price, when, and what happens in the event of departure, dismissal or disagreement. A well-chosen but poorly framed scheme creates more problems than it solves.
Key takeaways
- The choice follows from the objective, the legal form and the liquidity horizon, in that order.
- BSPCE are out of reach for most established SMEs, because of the age condition.
- A scheme with no organised exit in prospect produces no lasting effect.
Sources and references
The schemes described refer to the texts in force listed below. Their tax and social-security treatment changes regularly: have the applicable state of the law confirmed before any decision.
- French General Tax Code, article 163 bis G. Regime of founder's share warrants (BSPCE).
- French Commercial Code, articles L.225-197-1 et seq.. Regime of free share awards.
- French Labour Code, articles L.3332-1 et seq.. Company savings plan and collective employee ownership.
- Law no. 2023-1107 of 29 November 2023 on value sharing within the company. The text that created, among other things, the company value-sharing plan (PPVE). www.legifrance.gouv.fr
- BOFiP-Impôts, BOI-RSA-ES-20-40-10. Administrative doctrine on the scope of BSPCE: eligible companies and issuance conditions (article 163 bis G of the CGI). bofip.impots.gouv.fr
This article is intended as general information. It constitutes neither legal advice, nor tax advice, nor an investment recommendation. Sources last checked: September 2026.
