Especially in today’s economic crisis, the entrepreneur has to think about how to restructure his business so that he can continue working as soon as the crisis caused by COVID-19 ends. Entrepreneurs often forget one very important aspect in such restructuring processes, which are often carried out even under objective circumstances, such as a ‘transfer of an undertaking’ and the consequences it may have.
Transfer of undertakings is regulated by Section 20 of the Commercial Law, providing that:
- If an undertaking or an independent part thereof is transferred to the ownership or use of another person, the acquirer of the undertaking shall be liable for all the obligations of the undertaking or its independent part. However, in respect of those obligations which arose prior to the transfer of the undertaking or its independent part to the ownership or use of another person, and the terms or conditions for the fulfilment of which come into effect five years after the transfer of the undertaking, the transferor of the undertaking and the acquirer of the undertaking shall be solidarily liable.
- In the case of the transfer of ownership or use of an undertaking or an independent part thereof, claims and other rights included in the undertaking or its part shall be transferred to the acquirer of the undertaking.
- An agreement, which is in contradiction to the provisions of this Section, shall be void as to third parties.
In practice, the transfer of a company is detected and it is also used by the SRS to recover unpaid taxes on the company from the acquiring company, and in most cases, this is an unpleasant surprise for entrepreneurs. Actually, a transfer of an enterprise can be identified in the following cases if a set of following circumstances is met;
- The acquiring company is registered at the same address as the company;
- The acquiring company carries out its business at the same premises and in the same industry as the company;
- The acquiring company has the same ownership structure and board;
- The acquiring company has retained the same identity, including website, trademark and public domain publications, made by the company
- Most employees have moved to the acquiring company;
By applying for the service on the website, you will receive a free solution for the transfer of accounting data in order to more easily start cooperation with us.
As well as a 2-hour free consultation on how to improve your business!