Surely you will have seen on more than one occasion some business in transfer. It can be a seductive idea to acquire a business that is already up and running. But what does it really imply? There are many aspects that we must take into account, one of them being transfer rights.
To help you clarify these concepts, we will explain what the transfer of a business consists of and what are the procedures involved. In addition, we will talk more in detail about transfer rights, very important if the premises are being leased. If you are interested in the subject, do not hesitate to continue reading.
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How is the transfer of a business?
Before talking about transfer rights, we will first discuss what the transfer of a business consists of. It is basically a contract through which tangible goods (furniture, products, etc.) and also intangible goods (customers, brand, etc.) are transferred. There are several reasons why a person may decide to transfer their business, the most common being retirement, illness or lack of time, among many others. Of course, the person who wants to acquire the business has to pay the transfer. The price is determined in the respective contract.
As you will surely imagine, carrying out a transfer of a business is not as simple as it seems. There are a series of documents and procedures that we must carry out before finishing the process. Let's see what they are:
- Assignment contract: It contains the assets that will be transferred and everything that is on the premises and that is necessary for the business in question. The price will also be stipulated in the contract, which will also include the client portfolio, infrastructure, stock, etc. And if necessary, the license would also be included in this step.
- Assignment of lease: As dictated by Law 29/1994 on Urban Leases in Article 32, the lessee has permission to sublease the premises or assign it without the consent of the lessor. However, he must notify it at least 30 days in advance, since the owner of the premises can increase the rent by up to 20%, if he wishes.
- Opening license: It is obtained in the town hall of the municipality to make the change of ownership. They usually request a series of documents, the most frequent being these: DNI with a photocopy, the identification of the previous license and, for companies, the powers of attorney of the person who signs the application and the deed of incorporation.
- Company or self-employed registration: Now we only have to register as self-employed or company. After a transfer, we can choose various modalities, these being the most common: Civil society, Limited society (SL), Objective Estimate and Normal Direct Estimate or Simplified Direct Estimate. Here We explain the steps to follow to register as self-employed.
All this can become a very careful mess. For this reason it is highly recommended to go to a specialized advisor to manage all these procedures. In addition, it will be in charge of informing us about our tax obligations. In this way we will avoid being sanctioned for some poor management.
What are transfer rights?
Now that we understand a little better what the transfer of a business consists of, let's see what exactly are the so-called transfer rights. Well, it's basically of the amount that a person, whether legal or physical, has to pay to acquire the premises in question. This place has to be a business, that is, a place where any type of economic activity takes place. In addition, it must be leased so that it can be subrogated as a tenant.
In other words: The transfer rights, which must be paid, they imply a transfer of both the obligations and the rights of the lessee to a third person. This takes the place of the tenant. In this way, the third party becomes the tenant of the already existing original rental contract, to which it was initially alien. Thus, his position is subrogated, that of tenant.
Characteristics of transfer rights
transfer rights must meet certain guidelines. For this reason, we could say that the main characteristics of the transfer rights are the following:
- The person who acquires the premises has to pay, yes or yes, a consideration or a certain price.
- After transferring the premises the previous rental contract is maintained with the same terms, it cannot be changed.
- Transfer rights must be agreed in the lease. If not, the lessee is obliged to obtain the lessor's consent if he wants to transfer the premises.
- There are only transfer rights for commercial premises, where economic activities are taking place. It cannot be applied to real property used as a home.
- It is imperative that the transfer be registered in a public deed.
- It is also mandatory to convincingly notify the landlord that the transfer is going to take place.
- Stock cannot be transferred, only the premises.
To understand a little better how transfer rights work, let's take a small example. Eva is the owner of a place and to get something out of it, she rents it to Paco, who says he opens a cafeteria there and thus carries out a commercial activity. Therefore, Paco is the tenant and Eva is the landlord.
With the passage of time, Paco decides that he does not want to continue running the cafeteria and wants to transfer the premises. Then Alex appears, who is neither the tenant nor the owner of the premises. However, he is interested in the business and would like to keep the premises. To do this, Alex would have to subrogate as a tenant. In other words: I would take Paco's place in the initial lease, keeping all the implied terms.
I hope that with this example the transfer rights have been made clear. Basically the tenant is changed, without touching the original contract. This can be somewhat advantageous in some cases, but remember that it is of the utmost importance read the contracts well, whatever they are, looking especially at the fine print.