Transfer of an enterprise
 

The Commerce Act  (CA) defines the enterprise as rights, obligations and factual relations (art. 15 of the CA). Тhe transferrable enterprise, includes all assets and liabilities, which are used and formed in relation to the performance of its business operations. Тhe enterprise includes both material assets, used to carry out the business operations – e.g., production buildings, facilities and land properties, and intangible assets – e.g., rights to patented trademarks, inventions, etc. In the case of a transfer of an enterprise, the new owner assumes all the rights and obligations under the contracts, to which the enterprise is a party.

The enterprise may be transferred by means of a transaction, as the law requires that the signatures for its conclusion and its contents are notarized. Most often, the enterprise is transferred by means of a share purchase agreement.

 

How is the enterprise transferred?

Transfer consent/decision

Transfer consent/decision

When the entire enterprise of a company is transferred, the following will be necessary:

  • The consent of all shareholders, given in writing with notarized signatures – when the transferor company is a general partnership (GP) or limited partnership (LP);
  • The decision of the general assembly of the shareholders approved by a majority of the owners of at least 3/4 of the voting stock/shares – when the transferor is a limited liability (LTD) or joint-stock (JSC) company;

the decision of shareholders with unlimited liability, made unanimously in writing with notarized signatures and Decision of the general assembly of the shareholders, approved by the majority of 3/4 of the voting shares present – when the transferor company е limited partnership with a share capital (LPSC).

Signing a contract  with the buyer for the transfer of the business enterprise with notarized signatures and contents

Signing a contract  with the buyer for the transfer of the business enterprise with notarized signatures and contents

The contract usually specifies the contents (assets, liabilities, the rights and obligations) of the transferred enterprise. It is important to note that the contract is highly complex and it is key for the entire procedure for the transfer of an enterprise, and that is why it is advisable that such contract is prepared and coordinated with appropriate expertise.

Payment of salaries and social-security contributions

Payment of salaries and social-security contributions

An enterprise that has employed workers or employees, may be transferred, after its current holder pays all due salaries, compensations, compulsory social security contributions payable to the workers and employees, including workers and employees, the employment legal relations with whom have been terminated within three years before the transfer of the enterprise.

 

Important to know
Important to know

The enterprise may be transferred without the payment of such liabilities, only if the parties to the the contract agree that the transferee of the enterprise will make all due payments.

 

Notification of creditors and debtors

Notification of creditors and debtors

It is possible that the transfer of the enterprise affects the interests of persons, who have liabilities towards the enterprise (debtors) and persons, towards whom the enterprise have liabilities (creditors). Therefore, both debtors and creditors must be notified of the transaction by the person, transferring the enterprise (its existing owner). Such notification may be performed for example, by a registered letter with receipt of delivery or by means of a notarial invitation.

Notification of the National Revenue Agency and registration of the transfer with the Commercial Register

Notification of the National Revenue Agency and registration of the transfer with the Commercial Register

In order to become effective, the contract for the transfer of an enterprise, must be registered with the Commercial Register at the same time, to the files of both parties to the contract.

The application is submitted to the Registry Agency by the bodies, representing the companies or their authorized representatives. The application may be submitted online, subject to the use of a qualified electronic signature (QES) . Before filing the application for registration of the transfer, the candidate notifies the territorial directorate of the National Revenue Agency (NRA) at its registered office, accordingly. The Territorial Directorate of the National Revenue Agency issues, within 60 days, a certificate of notification receipt (art. 77 of the Tax and Social Security Procedure Code). Template of the notification to the NRA, can be found at the following address.

The application for registration, sent to the Registry Agency, must be accompanied by the following documents:

  • The share purchase agreement for the transfer of the enterprise;
  • The decision as per para. 1;
  • A declaration of the absence of outstanding salaries, compensations, compulsory social security contributions to the workers and employees, including workers and employees, the employment legal relations, with whom have been discontinued within the previous three years before the transfer of the enterprise. The declaration template can is available at the website of the Registry Agency (a declaration as per art. 16, para. 2 related to art. 15, para. 4 of the Commerce Act);
  • A declaration regarding the authenticity of the circumstances to be registered;
  • A document for paid state fee (the amount of the payable fee may be checked in the Tariff of State fees, collected by the Registry Agency;
  • A certificate of notification receipt, issued by the Territorial directorate of the NRA;
  • A declaration, confirming that the application and the attached documents have been provided by the candidate.

 

Important to know
Important to know

When real estate property is transferred by the share purchase agreement, the agreement must be also registered with the Property Register.

For the purposes of the protection of the creditors, the trader, acquiring the enterprise, must manage separately the business enterprise he has acquired for a period of at least 6 months from the date of registration of the transfer with the Commercial Register. The separate management is a specific regime of performance of legal and physical activities with regard to the transferred business enterprise. The management is considered separate and the trader, acquiring the enterprise, treats it as a separate set of assets and reports it separately in its accounting records.

 

For more information
For more information

For more information on the transfer of an enterprise and the related regulatory framework, please refer to the websites of the:

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