Transfer of assets and liabilities

Transferring your company to someone else can be done in various ways. If the company was incorporated as a private or public limited company, the shares in that company can be sold and transferred.

Another possibility is to transfer only assets and liabilities by means of an asset/liability transaction. In that case, only certain assets and contracts are transferred to the buyer.

From legal, tax and business perspectives, there are some major differences between a share transaction and an asset/liability transaction. The advantages and disadvantages for seller and buyer also vary widely.

Transfer of shares

When a company is transferred by selling all its shares, the buyer automatically acquires everything that belongs to the company, that is to say all possessions, debts, rights and obligations, and contracts with employees, suppliers and customers.

In fact, the company does not change at all, it only gets a new owner.

Transfer of assets and liabilities

In an asset/liability transaction, the company acts as seller. The buyer only takes over the assets, debts, rights and obligations of the company as mentioned in the purchase agreement. The buyer therefore knows what they are taking over. This reduces the risk of unpleasant surprises.

A special rule applies to staff: an asset/liability transaction may involve a transfer of undertaking. In that case, all the employees go with the company, even if that has not been described as such in the sales agreement.

What should you pay attention to?

In the event of an asset/liability transaction, it is essential that the acquisition agreement accurately describes what exactly is being transferred and what is not. In the case of a share transfer, for example, the buyer should investigate in advance what assets, debts, rights and obligations the company has.

With every company takeover, whether it is a share transfer or an asset/liability transaction, it is important that you achieve cooperation between lawyer, notary, tax expert and accountant at an early stage. Hekkelman can guide you expertly through this process. Please feel free to contact us. We will gladly help you further.