When I acquire a business, will I also inherit its debts?
When acquiring a commercial business, the assets and liabilities, i.e., debts and receivables, cannot be considered separately. The business’s assets and liabilities are considered fully transferred. The acquisition of the commercial business along with its assets and liabilities is regulated in Article 202 of the Turkish Code of Obligations (Law No. 6098) under the heading “Acquisition of Assets or a Business.”
“Anyone who acquires an asset or a business along with its assets and liabilities becomes responsible for the debts in the asset or business from the date they notify the creditors or announce it through an advertisement in the Commercial Registry Gazette for commercial businesses, or in one of the newspapers distributed nationwide in Turkey for others. However, for a period of two years, the previous debtor remains jointly liable with the acquirer. This period begins for matured debts from the notification or announcement date; for debts that will mature later, it begins from the maturity date. The consequences of assuming the debts in this manner are similar to those resulting from an external assumption agreement. The two-year period mentioned in the second paragraph does not begin until the acquirer fulfills the obligation to notify or announce.”
Can I also transfer the business name when transferring a business?
The seller of the business may choose not to transfer the business name. Although the transfer of the business name is optional, if no provision is added to the contract stating that the business name is not transferred, it is considered transferred along with the business.
Can the lease agreement of the business also be transferred?
If the transferred business has a lease relationship, written consent must first be obtained from the property owner for the lease agreement to be transferred. According to Article 323 of the Turkish Code of Obligations No. 6098, titled “Transfer of Lease Relationship”: “The tenant may not transfer the lease relationship to another party without the written consent of the lessor. The lessor may not withhold this consent in business premises leases without just cause. With the written consent of the lessor, the person to whom the lease relationship is transferred replaces the tenant in the lease agreement, and the transferring tenant is released from their debts towards the lessor. In business premises leases, the transferring tenant remains jointly liable with the transferee until the end of the lease agreement and for a maximum of two years.”
According to this article, with the transfer of the business lease agreement, all obligations and responsibilities arising from the lease agreement, such as the obligation to pay rent, will pass to the new tenant. However, the former tenant will continue to bear joint responsibility for two years. If the lease agreement is for a fixed term and less than two years remain until its expiration, the former tenant’s (the transferor’s) liability will be limited to the remaining period.
If unknown debts of the business emerge after the transfer, will I be liable for them?
Since a commercial business is transferred as a whole and the acquirer is responsible for the debts of the business, if any unknown debts of the acquired business emerge later, the acquirer will be liable for them as well. Therefore, it is essential to learn about all the debts of the business before the acquisition.
What Should a Business Transfer Agreement Look Like?
Business transfer agreements are contracts that must be in writing. According to Article 11, Paragraph 3 of the Turkish Commercial Code, titled “The Principle of Integrity of Commercial Business,” “A commercial business can be transferred as a whole without the need to separately execute compulsory legal actions for the transfer of its assets. Unless otherwise stipulated, the transfer agreement is considered to include the tangible assets, business value, lease rights, trade name, other intellectual property rights, and assets specifically allocated to the business. The business transfer agreement and other agreements regarding the commercial business as a whole must be made in writing and registered and announced in the trade registry.”
Therefore, the transfer agreement must be in writing, as stipulated by the law. This written form is a requirement for validity.
There are mandatory elements that must be included in the agreement. In addition to the elements listed below, the parties may add provisions that are not contrary to the mandatory provisions of the law.
- The names, surnames, titles, and addresses of the parties
- Written declaration that the commercial business is being transferred as a whole
- Payment terms
Is it mandatory to register the business?
After a commercial business transfer agreement is made, the registration and announcement of the transfer in the trade registry is a constitutive element. In other words, even if the agreement is signed, the transfer will not be valid unless it is registered and announced in the trade registry.
Acquiring a commercial business is a process that requires great attention. Carrying out this process with legal consultancy ensures a smoother progression. For more detailed information, you can contact us.
Lawyer Gökhan AKGÜL & Lawyer Duygu OKUNAKOL
Antalya Commercial Lawyer – Antalya Lawyer
A commercial lawyer is a specialist who provides legal support in all commercial transactions, from the establishment to the liquidation of companies. Especially during the business transfer process, they offer professional consultancy on critical matters such as preparing the transfer agreement, analyzing legal risks, and protecting elements like trademarks and trade names. Since the transfer of a business includes various elements such as company mergers, sales transactions, or shareholder changes, working with an experienced commercial lawyer is of great importance to prevent potential legal disputes in the future.
Our office in Antalya has been providing legal services for a long time with our team of lawyers specialized in commercial law. You can contact us through the contact section for all your legal matters, including commercial law, and schedule an appointment.
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