Asset deal

A company can be transferred in different ways. The most important choice to be made is whether to sell the company by a share deal or by transferring all or part of its assets (an asset deal). Here we will discuss the asset deal, i.e. a transfer of selected assets and/or liabilities whereby the company selling receives a consideration. It is also called the transfer of a business, by which is meant the entirety of resources used to conduct a business and attract and retain customers.

A so-called asset deal has the advantage that you do not have to take over/sell the entire company but only the components that you wish to take over/sell. In other words, as a party, you can do some cherry-picking by only buying the assets you are interested in. The disadvantage of an asset deal is that it is less obvious in practical terms.

The subject of the transfer are all isolated assets, each of which follows its own rules regarding purchase/sale or contribution and opposability to third parties. Just think of the transfer of a property, which requires the intervention of a notary. Or when contracts are transferred, this must be done in most cases with the consent of the contracting party. A careful identification of

the object of the sale is therefore essential.

In addition, the rules on fraud, error and violence from the Belgian contract apply. These are mandatory and parties cannot negotiate them away in a contract beforehand.

Not unimportant here is CAO n°32bis of the Collective Labour Agreement Act (CAO), which stipulates that when you take over a company, you automatically take over all employment contracts as well. In other words, the personnel connected to the business being transferred are, as it were, automatically included in the transaction. In addition, the individual employment conditions must, in principle, be retained. A relatively unknown, but not unimportant obligation in the case of a takeover.