Transfer of business

1.There are several options for transferring a business, depending on who is transferring it and to whom.

If a company is used, the company itself can actually be transferred (share deal). This means that all goods, stocks, receivables, debts, ... are transferred in one move. Important guarantees must be provided for the buyer by conducting a due diligence investigation, including a non-compete clause that applies to the buyer . In that case, it is important for the seller to provide a surety for payment of the agreed price.

2. This takeover can also take place through a merger with an existing company. A series of rules must then be followed, such as accurately informing the shareholders about the operation, who then submit the proposal in the presence of a notary, by special majority ( 3/4 and presence of at least 1/2 of the share capital). will be able to accept or reject. It will then be published in the Belgian Official Gazette, and creditors who can demonstrate that their rights could be compromised as a result of the merger can demand additional securities within 2 months of publication. It is true that the acquiring company takes over all obligations.

3. The takeover can also take place after a previous operation of splitting an existing company into 2 or more new companies. The old company will then be dissolved. Here too, the procedure is identical to that of the merger.

4. This can also be done through a partial demerger (transfer of rights and obligations, without the existing company disappearing and the existing shareholders acquiring shares in the new company. At that time, the procedure for demerging will have to be followed broadly.

5. The transfer of the business can also take place through the contribution of a "general entity" or of a "line of business". The first refers to the entire capital that is therefore contributed to another or new company. The transferor then acquires shares. In a sense, this leads to a holding company. A line of business is a whole that is technically and organizationally independent. A company can be a line of business. An accurate description is required. In both cases, the procedure will be similar to that of a merger and demerger.

6. If the company is run by a natural person, the business itself is transferred (asset deal) (a company can of course also sell its business, but this is often used on the back of creditors, as a so-called bereavement construction).

As a result, the parties can agree which items will or will not be transferred. For the transfer, the applicable legal rules must then be followed for each component (for example, sale of the real estate through the notary).

7. The debts relating to certain assets can be excluded at the time of the takeover, which can therefore lead to a significant impoverishment of the company, which can thus be rendered insolvent. When done consciously, it can become a crime and lead to responsibility. Screen companies are sometimes used to make the whole thing opaque. A complaint with civil party status may sometimes be appropriate. Patience is required.

8. If the business is transferred by a natural person to a company, it should not be forgotten to also provide a personal security for the persons behind the acquiring company, if the payment is deferred.

9. There is also the possibility to draw up an agreement to operate a business. The owner of a business (who may not have the time to operate it) or a prospective buyer who has a trial period built into his takeover contract calls on a third party to operate it. This can take the form of a lease of a business, a contract of work or even an employment contract.

Often one party has the capital and the other has no capital, but does have the capacity to exploit it. At that time, this certainly offers many possibilities.

We can assist you with every element of the transfer of a business and provide you with a tailor-made solution.

( text revised until 31.4.2019)