1 guide on the topic “Transfer”: legal obligations, concrete procedures, costs and deadlines.
A business transfer passes the activity on to a buyer in exchange for a price. It happens at retirement, after a change of direction or following an unexpected offer. This page helps sellers and buyers understand the main stages and pitfalls of such a deal.
In Belgium, such a deal takes two main forms. Each has very different legal and tax effects.
In a share deal, the company stays the same. It keeps its contracts and licences, but also its hidden liabilities. In an asset deal, the buyer chooses what to take over. However, each contract must then move to the buyer, often with the other party's consent.
Tax treatment also differs sharply, for seller and buyer alike. So have both options costed before negotiating. The FPS Finance publishes the applicable tax rules.
A transfer often takes months of preparation. Here is the usual sequence.
Several valuation methods coexist. Some start from net assets, others from future profits. Our article on selling or transferring a business covers each stage.
The timetable also depends on the size of the company. A small firm sometimes changes hands within a few months. A company with several sites or employees often needs more time. Above all, plan a transition period: the seller introduces the buyer to customers and passes on know-how.
Several issues weigh directly on the price. First, clear annual accounts reassure the buyer. Second, key contracts must remain transferable. Check change of control clauses with customers and suppliers. On this point, see the essential commercial contracts.
In addition, employees in principle follow the transferred business. A collective labour agreement protects their rights. Finally, the agreement often includes a liability warranty. The seller then answers for earlier debts that surface after the sale.
A successful transfer starts long before the sale. Between shareholders, a shareholders' agreement already organises exits through pre-emption or drag-along clauses. A combination with another company also remains possible. In that case, discover the merger procedure.
If no buyer comes forward, voluntary closure remains an option. Then see dissolution and liquidation. Whatever the scenario, bring in an accountant and a lawyer early. Careful preparation always secures better terms.
