The term of the commercial enterprise is defined in art.15, para 1 of Commercial Act as the aggregate of rights, obligations and factual relations. Being such aggregate the commercial enterprise may be subject to assignment. However, what happens if only part thereof has to be assigned?
This issue has been dealt with in both practice and theory.For instance, in ruling No.213 of 30.12.2010 of the Supreme Cassation Court under commercial file No.29/2010, II.division, the court has expressed the opinion that despite the lack of an explicit statutory provision, a real or ideal part of a commercial enterprise may be per argumentum a fortiori subject to assignment pursuant to art.15, para 1 of the Commercial Act. This ensues from art.15, para 2 of the Commercial Act as well, which requires a resolution under art.262p of the Commercial Act for the assignment of the entire enterprise of a company – but argumentum e contrario such resolution is not necessary if only a part of the enterprise will be assigned. The specific requirement with the assignment of a part of the enterprise is that the part being assigned shall be financially or otherwise reported separately in order for the subject of the assignment to be clearly individualized, i.e. individualization of the rights, obligations and factual relations that are to be assigned by the assignor to the acquirer shall be achieved. The separation of the real part of the enterprise being assigned is a pre-condition for the assignment deal to take legal effect having regard to the specific provision of art.15, para 3 of the Commercial Act, art.16 of the Commercial Act and art.16a of the Commercial Act, setting forth the joint liability both of the assigning subjectand the acquirer of the enterprise, the entry of the agreement, the separate management of the enterprise within the term under art.16a, para 1 of the Commercial Act and the other security means in favour of the creditors.
It is unanimously accepted in both practice and theory that the assignment of only a part of the commercial enterprise is acceptable.
Concerning the assignment of an ideal part of a commercial enterprise comprising a real estate – we have to mention the legal conclusionscontained in a ruling No. 113 dd.12.06.2012 under case No. 271/2011 of District Court, Pleven and in a ruling No. 303 dd.27.11.2013 of an Appellate Court, Veliko Tarnovo by which a ruling 113 is re-confirmed. The issue that is dealt with concerns the transfer of an ideal part of a commercial enterprise. The appellate court has re-confirmed the legal conclusions of the district court that in order for the assignment of aggregate comprising a real estate to take legal effect, a resolution of the General Assembly of the company shall be adopted. This is the case although per argumentum a fortiori upon assignment of a part of the commercial enterprise such a resolution under art. 15, para 2 in connection with art. 262 p of the Commercial Act should not be required. However, according to the practice of the appellate courts if the law or the company’s incorporation act envisages that the transfer of a real estate falls within the authority of the General Assembly, then such a resolution shall be taken in the respective manner and the minutes of the General Assembly shall be filed with the Commercial Register upon entry of the deal.
Particularly interesting is the issue with the assignment of the factual relations. The factual relations do not confer particular rights or obligations to the persons involved therein and their existing and emerging do not cause a concrete legal effect. Therefore, from the assignment no legal succession arises. The factual relations include the information in possession of the company such as know-how, gained experience, staff qualification and organization of the business activity. Following the fact that no legal succession is concerned, in the theory is laid down the conception that these factual relations should continue with other persons having been involved through substitution of the participating legal subjects. For instance, information kept by the company should be provided to the acquirer as well and the latter has to be given the opportunity to take use of the actual organization of the production and business activity. The contact details of the clients shall also be provided from the assigning company to the acquirer.
It is presumed that after assigning a part of the commercial enterprise the relevant parties to the deal wish to do this business in a parallel way. Normally, after accomplishment of such a kind of deal the activity should be carried out if not jointly then in a supportive co-operation between the parties.
Important to note is the obligation of the acquirer to separately run the part of the enterprise, which obligation is the most important tool for the protection of the creditors. The legal successor also assumes the obligations of the former owner of the enterprise. The aim is to be granted security to the creditors that they could utilize the property of their former debtor as if the assignment had not taken place. The separate management means that the acquired part of the enterprise shall not be mixed with the status quo property of the acquirer. This means that status quo rights of the one aggregate can not be subject to enforcement or security of status quo obligations of the other aggregate. The part of the enterprise assigned shall be financially reported separately from the other property of the acquirer, which itself does not mean that this acquirer does possess two enterprises or properties. Therefore, deals between the two separately run aggregates are not possible. Pursuant to Art.16a, para 1 of the Commercial Act the said obligation survives for a period of time of 6 months after the entry of the assignment. However, in theory, the conception is widely accepted that this period of time commences not from the date of entry into the Commercial Register but still from the date of accomplishment of the assignment. This broader interpretation aims again the protection of the creditors. The members of the managing body of the legal successor are jointly liable before the creditors for the damages caused to the creditors as a result of the failure to follow the obligation for a separate management.
Amendments of the VAT Act were introduced by State Gazette, issue 104 of 2020, for the purpose of implementing the EU rules concerning the distance sales of goods and services, introduced for the EU-member...
Can a resolutory condition which constitutes action or inaction of the parties to a contract be agreed? Under Article 9 of the Obligations and Contracts Act: “The parties can freely determine the content of...