Neni prevod zavodu jako prevod zavodu

There is no transfer of an enterprise like a transfer of an enterprise

When running a business, an entrepreneur usually creates a so-called enterprise. The law defines it as an organised set of assets created by the entrepreneur and used by his will to carry on his business. Thus, an enterprise usually consists not only of business premises (including real estate) and their equipment, but also of the entrepreneur's goods, know-how and contractual relations, including relations with employees, as well as debts and receivables.

The law understands an enterprise as a thing (specifically a collective thing). It can therefore be disposed of as a thing, i.e. it can be sold, donated, exchanged, pledged or, for example, contributed as a non-cash contribution to a business corporation.

The fundamental advantage in disposing of an enterprise is its versatility. If an enterprise is transferred, the buyer acquires everything that belongs to the enterprise as a whole. It is not necessary for the transfer agreement to enumerate the individual components of the enterprise being transferred. The purchase of an enterprise is also automatically deemed to be a transfer of the employer's business activities. Similarly, this also applies to a branch, i.e. a part of an enterprise forming a separate organisational unit. The transfer of an enterprise may also have the advantage of exempting the transaction from VAT.

The parties may agree to exclude certain items from the transfer of an enterprise, e.g. one of the company cars. If this does not deprive the transferred unit of the nature of an enterprise, this does not affect the universal effects of the transfer of the enterprise.

However, the legal act by which the enterprise is transferred must clearly indicate an intention to transfer the entrepreneur's assets as a whole, as an enterprise. If this intention is not apparent from the legal act, there is a risk that the contract will be regarded as a transfer of the individual components of the enterprise, i.e. the transfer of assets, receivables, contracts, etc. In such a case, it is necessary that the legal transaction defines the individual items to be transferred with sufficient certainty, otherwise it will be apparent due to vagueness. Moreover, the whole transaction loses the desired efficiency in such a case, since, unless it is a transfer of an enterprise, the consent of the creditor or the assigned party is in principle required for the assumption of a debt or the assignment of a contract. The VAT regime would also be different.

In practice, however, the opposite situation may also arise where the parties to the contract seek to exclude the effects of the transfer of (part of) the enterprise, i.e. in particular the transfer of the transferor's liabilities, by transferring specified assets. Such a practice may be legitimately challenged by creditors concerned about the recoverability of their claims against the transferor.

Furthermore, when disposing of the enterprise, it is necessary to bear in mind that the transfer of ownership of the enterprise as a whole takes place only at the moment of publication of the document of purchase of the enterprise in the Collection of Deeds of the Czech Commercial Register by the purchaser. Omitting this last step can have very negative liability as well as tax consequences for those involved.

It should be added that if the enterprise is acquired by an entrepreneur who is not registered in the Czech Commercial Register, the ownership of the enterprise is already acquired by the effectiveness of the transfer agreement.

Alternatively, if you would like more detailed information, please also contact the authors of this article or other members of EY Law or the EY team with whom you work.

Authors:

Dalibor Šimeček

Klára Hurychová