Do you want to transfer your enterprise to another person?
An enterprise is a source of wealth and job creation. We all aim for it to continue in existence, grow, achieve its fullest possible extent.
A business owner may decide to transfer an enterprise to another individual for reasons which may vary widely: personal reasons, transfer of the business to children or heirs. For professional reasons: to focus professional efforts in some other field, to generate resources in order to invest, to pay down debt.
The person wishing to acquire an enterprise may act out of different interests: to embark on an enterprise activity based on an existing business, make an attractive investment, open up a new market for a business, obtain a competitive edge for an enterprise: size, markets, intellectual property, presence in other countries, acquire a competitor.
An enterprise is a set of elements in operation, with interconnections between them. An enterprise comprises: 1- Fixed assets: property, premises, buildings. Movable assets: furniture, computer equipment, machinery. 2- Intangible assets: patents, clientele, know-how, intellectual property, suppliers, contacts in other countries and others.
It is this set of elements which makes an enterprise, allows it to generate value.
The transfer of an enterprise to another person means passing on to that person this set of tangible and intangible assets. There are methods for this: sale, inheritance, donation, agreement, court award, comprehensive assignment of assets and liabilities of the enterprise.
It is important to perform a clear analysis of the economic and equity situation of the enterprise. Another challenging aspect is the economic valuation of the enterprise.
In order to transfer your enterprise you need to distinguish between two possible situations:
- A sole trader. The enterprise is transferred in various forms, for example by means of a sale agreement. It is advisable to sign a deed before a notary to place the transfer on record. It is a good idea to include a list of the elements of the enterprise.
The various elements of the enterprise are transferred by means of this legal act. As there are various elements comprising an enterprise, you will need to consider: the official processes and regulations for the transfer of each of them: real estate, premises, furnishings, intellectual property, credits, contracts, etc. The changes are recorded with the various public authorities: companies register, tax office, social security, official registers and others.
- The enterprise could have the legal status of a company for example a limited or public limited company. It will have capital represented by stock units or shares. In such cases transfer of the enterprise involves the transfer of these shares or stock units by sale, inheritance, donation or some other act of legal business. The regulations governing the transfer of shares and stock units apply to the change of ownership.
If the company is listed on the stock exchange it will be subject to the regulations governing these markets and formal takeover bids. In such cases the National Security Market Commission plays a key role.
Mergers of enterprises with company status also have their own regulations.
If the transfer involves significant changes to the enterprise, then it will often be recorded in the companies register. In other official registers also.
In the case of acquisitions or mergers of large enterprises, market competition rules may come into play.
Taking over an existing company is a worthwhile alternative to setting up a new business.