Transfer of business assets and liabilities
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Companies, economic interest groups (EIGs) and natural persons may transfer all or part of their business assets and liabilities to another structure (a company, etc.) within the framework of a professional assignment.
Who is concerned?
Natural or legal persons engaged in an economic activity.
An operation to transfer business assets and liabilities to a foreign company, EIG or natural person is also possible, unless prohibited under the national law applicable to the foreign entity.
Prerequisites
The business assets and liabilities may only be transferred if the inventory shows that assets exceed liabilities.
How to proceed
Preparing for the transfer
The management bodies of each of the parties involved in the transfer must draw up draft terms of transfer.
The draft terms of transfer must specify/include:
- the legal form of the business;
- the name of the person/company;
- the registered office or domicile of the parties involved in the transfer;
- an inventory that clearly identifies the assets and liabilities to be transferred;
- the total value of the assets and liabilities to be transferred;
- details of any compensation or consideration.
The draft terms of transfer must be filed with the Trade and Companies Register (Registre de Commerce et des Sociétés – RCS) for publication in the Electronic Compendium of Companies and Associations (Recueil électronique des sociétés et associations – RESA) by each of the parties involved in the transfer at least one month prior to the date of the general meeting that is called to rule on the transfer.
Enactment of the transfer
The same rules as applicable to divisions, with the exception of the consequences of a division, apply to transfers when:
- the parties to the transfer are companies having legal personality;
- the partners of the transferring business or group receive shares or units in the receiving business.
The management body of each business involved in the transfer must draw up a report setting out the reasons for the transfer.
This report must explain the legal and economic grounds for the planned transfer and, accordingly, must specify/include:
- the purpose and consequences of the transfer;
- the transfer agreement;
- the consideration offered for the transfer.
The transfer takes effect when the necessary decisions concerning the transfer have been taken by the parties involved.
Rights of creditors, bond-holders and holders of securities carrying special entitlements
In a transfer of business assets and liabilities, third parties' rights are protected.
Liability
When the allocation of an asset to be transferred cannot be determined on the basis of the draft terms of transfer, and agreement cannot be reached as to how it should be allocated, then the asset in question shall remain the property of the transferring entity.
When the allocation of a liability to be transferred cannot be determined on the basis of the draft terms of transfer, and agreement cannot be reached as to how it should be allocated, the parties to the transfer are jointly liable.
However, the receiving party's liability is limited to the amount of net assets allocated to them.
The parties to the transfer remain jointly liable for 3 years for the settlement of any debts incurred prior to the transfer.
Claims lodged against the transferring party will lapse 3 years after publication of the notice of transfer in the RESA. If the debt only becomes enforceable after the date of that publication, then the claim will lapse 3 years from the date it becomes enforceable.
Creditors
The parties to the transfer of business assets and liabilities must provide securities if so requested by the creditors, on condition that:
- joint liability lapses before the end of the 3-year period;
- the creditors can show that joint liability does not provide sufficient protection.
Creditors whose receivables are not included in the transfer may also request the provision of securities.
Creditors may lodge their applications with the President of the District Court having jurisdiction over the debtor's registered office.
The parties to the transfer who are required to provide securities may, instead, settle the debt, if doing so does not harm the interests of other creditors.
Publication of the notice of transfer
The transfer has no effect with respect to third parties until the required documentation has been published in the RESA.
Nullity of the transfer
The transfer of business assets and liabilities can only be nullified in the following conditions:
- it must be declared null and void by order of the Court;
- the written documentation or notarised documentation (where required) is lacking; or
- the decision taken by the general meeting of one of the parties involved in the transfer is nullified.
Proceedings to nullify the transfer can no longer be brought:
- after a period of 6 months from the date on which the transfer becomes binding on the party requesting its nullification; or
- if the situation has been resolved.
When it is possible to rectify the irregularity by virtue of which the transfer may be declared null and void, the judge will allow the relevant parties a certain period of time to do so.
The court order nullifying the transfer must be published in the RESA.
Third-party appeals against the decision to nullify the transfer may no longer be lodged beyond 6 months of the publication of the decision in the RESA.
The decision nullifying the transfer does not, in itself, release the receiving party from their obligations.
The receiving party is liable for any obligations they incurred:
- after the date on which the transfer took effect;
- before the date on which the decision to nullify the transfer was published.
The transferring party is also bound by these obligations.
However, the receiving party's liability is limited to the amount of net assets allocated to them.
Effects of the transfer
The transfer automatically entails the transfer, to the receiving party, of the assets and liabilities listed in the inventory.
The transfer of intellectual and industrial property rights, and of real rights other than securities on movable and immovable assets, is only enforceable against third parties in the conditions provided for by the special laws governing these operations.
The transfer has no effect with respect to third parties until the required documentation has been published in the RESA.
Online services and forms
Who to contact
House of Entrepreneurship
-
House of Entrepreneurship
- Address:
- 14, rue Erasme L-1468 Luxembourg Luxembourg
- Phone:
- (+352) 42 39 39 - 330
- Email address:
- info@houseofentrepreneurship.lu
Closed ⋅ Opens at 8.30
- Wednesday:
- 8.30 to 17.00
- Thursday:
- 8.30 to 17.00
- Friday:
- 8.30 to 17.00
- Saturday:
- Closed
- Sunday:
- Closed
- Monday:
- 8.30 to 17.00
- Tuesday:
- 8.30 to 17.00
'Contact Entreprise' at the Chamber of Skilled Trades and Crafts - Luxembourg
-
Chamber of Skilled Trades and Crafts 'Contact Entreprise' at the Chamber of Skilled Trades and Crafts - Luxembourg
- Address:
-
2, Circuit de la foire internationale
L-1347
Luxembourg-Kirchberg
Luxembourg
B.P. 1604 / L-1016
- Email address:
- contact@cdm.lu
- Website:
- http://www.cdm.lu/
Luxembourg Business Registers
-
Luxembourg Business Registers
- Address:
- Luxembourg
-
Luxembourg Business Registers - Luxembourg Office
- Address:
-
14, rue Erasme
L-1468
Luxembourg-Kirchberg
Luxembourg
L-2961 Luxembourg
- Phone:
- (+352) 26 428-1
- Fax:
- (+352) 26 42 85 55
- Email address:
- helpdesk@lbr.lu
- Website:
- https://www.lbr.lu/
Monday to Friday from 09.00 - 12.00 and 13.30 - 16.00
Registration helpdesk: Monday to Friday by appointment only -
Luxembourg Business Registers - Diekirch Office
- Address:
- Place Joseph Bech L-9211 Diekirch Luxembourg
- Phone:
- (+352) 26 428-1
- Fax:
- (+352) 26 42 85 55
- Email address:
- helpdesk@lbr.lu
- Website:
- https://www.lbr.lu/
Mondays, by appointment only
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Related procedures and links
Procedures
Links
Legal references
-
Loi modifiée du 10 août 1915
concernant les sociétés commerciales
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Loi modifiée du 19 décembre 2002
concernant le registre de commerce et des sociétés ainsi que la comptabilité et les comptes annuels des entreprises
-
Loi du 27 mai 2016
modifiant, en vue de réformer le régime de publication légale relatif aux sociétés et associations, - la loi modifiée du 19 décembre 2002
-
Règlement grand-ducal du 5 décembre 2017
portant coordination de la loi modifiée du 10 août 1915 concernant les sociétés commerciales
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