Transfer of a Commercial Enterprise

A transfer of a commercial enterprise is the transfer of a business as a whole, with its assets and liabilities. Real estate, movables, receivables, debts and intellectual property pass to the transferee under a single agreement without being transferred individually (TCC Art. 11).

Form and Registration

The agreement for the transfer of a commercial enterprise is made in writing, registered with the trade registry and published. The assets transferred and the debts assumed by the transferee should be specified clearly in the agreement.

Liability for Debts

Under the Turkish Code of Obligations (Art. 202):

• The transferee becomes liable for the business’s debts once the transfer is notified to creditors or published.
• The transferor remains jointly liable with the transferee for two years.

The transferee should therefore review the business’s debts through due diligence and obtain an indemnity from the transferor in the agreement. Special liability rules may also apply to tax and social security debts.

Employees

On the transfer of a workplace or part of it, employment contracts pass to the transferee with all rights and obligations (Labour Law No. 4857, Art. 6). The transferor and transferee are jointly liable for two years for debts arising before the transfer and due at the transfer date. The transfer alone is not a ground for termination by the employer.

Difference from a Share Transfer

• Share transfer: The company’s owner changes; the company remains intact with all its rights and debts.
• Business transfer: The buyer may take only the assets it wants and the debts it assumes in the agreement, subject to statutory liability rules.

Other Aspects

A business transfer may require Competition Board approval if the turnover thresholds are met; see Acquisition. Transfer of customer and employee personal data should also be assessed under data protection law. Assignment of contracts may require the counterparty’s consent.