Transfer of commercial enterprise

What is a Commercial Enterprise?

Article 11 of the Turkish Commercial Code defines a commercial enterprise as a business in which activities are carried out continuously and independently, aiming to generate income at a level exceeding the limit foreseen for a tradesman enterprise. Based on the definition, it is possible to list the elements of a commercial enterprise as exceeding the limit of tradesman activity, aiming to generate income and continuity.

The factors we mentioned above enable commercial enterprises to be distinguished from businesses. In this respect, it is concluded that every commercial enterprise is considered a business. However, a business can be considered a commercial enterprise only if it contains the elements we have mentioned.

Transfer of commercial enterprise is done frequently and for various reasons. Within the framework of this need, a number of principles governing commercial enterprise transfers have been adopted. The most important of these principles is the principle of freedom of contract. In addition, TTK has also adopted the principle of ease of transfer and flexibility. As a matter of fact, the Turkish Commercial Code allowed the transfer of the business to be carried out without the need for any procedural procedure other than the transfer agreement.

CONDITIONS FOR TRANSFER OF A COMMERCIAL ENTERPRISE

The transfer of a commercial enterprise refers to the transfer made within the framework of the provisions of Article 202 of the Code of Obligations.

According to Article 202 of the Turkish Code of Obligations; The person who takes over an asset or a business together with its assets and liabilities shall be liable to them for the debts in the assets or the business, starting from the date on which he notifies the creditors or announces it with an announcement to be published in the Trade Registry Gazette for commercial enterprises, or in one of the newspapers distributed throughout Turkey for others.

As can be understood from the text of the law, assets and liabilities must be transferred together for the transfer to take place. Another condition for the transfer is the execution of a written transfer agreement. 133/3 of TSY. Pursuant to the article, the legal validity of the transfer depends on the registration of the transfer agreement. Finally, depending on the characteristics of the situation, permission must be obtained by notifying the Competition Board.

In the light of our explanations, we can list the conditions of commercial enterprise transfer as follows;

1- Assets and liabilities should be transferred together.

2- A written transfer agreement must be made.

3- The transfer agreement must be registered.

4- Where necessary, permission must be obtained from the Competition Board.

COMMERCIAL BUSINESS TRANSFER AGREEMENT

In our law, the validity of contracts depends on compliance with the legal form requirements. The contract for the transfer of commercial enterprise is pursuant to Article 11/3 of the Turkish Commercial Code. It is subject to the validity condition written in article. As a matter of fact, according to Article 132 of the TSY;

"The transfer agreement for the transfer of a commercial enterprise is made in writing and includes the following:

a) Name and surname or title of the parties and notification address.

b) Elements of the commercial enterprise excluded from the contract.

c) An unconditional statement that the commercial enterprise has been transferred as a whole and in a way that ensures its continuity.

ç) Sales price and payment terms of the commercial enterprise"

Legal Nature of the Commercial Enterprise Transfer Agreement

TTK 11/3. Article "A commercial enterprise can be transferred as a whole and be subject to other legal transactions, without the need to carry out separate compulsory savings transactions for the transfer of the assets it contains." It is shaped like.

According to the regulation in the article, the commercial enterprise transfer agreement represents a disposition transaction. The contract made for the transfer of the commercial enterprise allowed disposition transactions to be carried out as a whole. Immovable properties located within a commercial enterprise can be acquired unregistered. It does not matter whether the conditions required for the transfer of real estate are met by law. No further action will be taken at the land registry office for the transfer of immovable properties, and the immovable properties will be acquired with a transfer agreement. Intellectual property rights, which are among the elements of the commercial enterprise, can also be acquired without the need for any other transaction. The purpose of this regulation is to facilitate the transfer of commercial enterprises and reduce bureaucracy.

The principle of ashyness is also valid for the passage of passives. In this context, in transfer agreements that include the transfer of debt, the debt will be assumed without the consent of the creditors. As a result of this regulation, the transferee will also be responsible for debts that he does not know about.

SCOPE OF COMMERCIAL BUSINESS TRANSFER

Common Transfer of Assets and Liabilities

As we mentioned above, the first condition for the commercial enterprise transfer is to transfer assets and liabilities together. The subject of the transfer agreement is the commitment to transfer the commercial enterprise as a whole, including its assets and liabilities. Contracts in which assets and liabilities are not transferred in their entirety will be deemed invalid. The obligation to transfer liabilities serves the purpose of protecting creditors.

But for the transfer to be valid, it is not necessary to transfer all elements of the commercial enterprise's assets. 11/2 of the Turkish Commercial Code. According to the article; Unless otherwise stipulated, the transfer agreement is deemed to include fixed assets, business value, tenancy rights, trade name and other intellectual property rights and asset elements permanently allocated to the business, and a parallel regulation to the TCC has been introduced with the Trade Registry Regulation. Accordingly, it is necessary and sufficient that the transferred elements enable the commercial enterprise to continue as a business. In this context, it is required that the elements to be excluded from the scope of transfer do not disrupt the integrity of the commercial enterprise and do not harm the continuity of the commercial enterprise.

As a matter of fact, in a decision of the 8th Civil Chamber of the Supreme Court of Appeals dated 2014, this situation was stated as follows: "According to Article 179 of the Code of Obligations (TBK Article 202), it is not necessary to transfer the entirety of a business or its assets for a business transfer. The transfer of a significant asset of the business also constitutes a business transfer. After the debt was born, the debtor sold goods related to the tunnel formwork materials at the construction site at a cost of 700,000 TL, and a significant part of the business "Since it is a transfer, the third party who transfers the goods will be responsible for the debts of the transferred business in accordance with Article 179 of the Code, and this transfer will not affect the rights of the creditor." It is expressed as follows.

The elements to be excluded from the scope must be specified in the transfer agreement.

What are the Elements Transferred by the Transfer Agreement?

As we mentioned above, the commercial enterprise transfer agreement includes fixed assets, business value, tenancy rights, trade name and other intellectual property rights, and asset elements that are permanently assigned to the business.

1-Fixed Assets

By fixed assets, we mean real estate and movable property that are necessary for a commercial enterprise to continue its activities, as well as machines, office supplies, raw materials and finished goods allocated for the same purpose. With the transfer agreement, fixed assets are transferred to the transferee without the need for any further action.

2- Business Value in the Commercial Business Period

Business value refers to the goodwill and loin cloth acquired by the commercial enterprise. Business value is also included in the scope of the commercial enterprise transfer agreement. However, the parties may decide otherwise. If the parties wish to exclude "pestemaliye-goodwill" from the scope of the commercial enterprise transfer agreement, they must clearly state this in the contract in question. Otherwise, the business value is deemed to have been transferred.

3- Tenancy Right During the Transfer of Commercial Enterprise

In cases where the real estate in which the commercial enterprise operates does not belong to the transferor, the tenancy right will pass to the transferee together with the transfer agreement. According to Article 323 of the Turkish Code of Commerce, the approval of the lessor is required for the tenant to transfer the rental relationship to someone else. However, it is also regulated that the lessor cannot consent to the transfer relationship without a justified reason. For this reason, in commercial enterprise transfers, if the lessor cannot show a justified reason, he will have to consent to the transfer of the lease relationship.

4- Trade Name in the Period of Commercial Enterprise

According to Article 49 of the Turkish Commercial Code, the transfer of a business also results in the transfer of the title, unless otherwise expressly agreed. In case of transfer, the transferee has the right to use the title as it is. The trade name will pass to the transferee unless the parties agree otherwise in the transfer agreement.

5- Other Property Rights

Unless otherwise agreed by contract, the transfer of the commercial enterprise also provides the transfer of trademark and patent rights. The parties may decide otherwise, but this must be clearly stated in the contract.

6- Assets Permanently Specific to the Business

What should be understood from the assets permanently allocated to the business cannot be determined in advance. For this reason, it is necessary to make a separate evaluation according to the characteristics of each case.

REGISTRATION DURING THE TRANSFER OF A COMMERCIAL ENTERPRISE

As we mentioned above, in order to complete the transfer of the commercial enterprise, the transfer agreement must be registered and announced in the trade registry. Registration obligation is a legal regulation. Registration obligation is regulated by Article 202 of the UK Code. As a matter of fact, TSY's 133/3. The article also regulates that the transfer of a commercial enterprise will become effective upon the registration of the entire transfer agreement.

With the notification and announcement made to the trade registry, third parties are made aware of the transfer. We have stated above that the transfer of the commercial enterprise also includes the transfer of debt. The transfer of the debt must be announced in the Trade Registry Gazette and announced to third parties, which is very important in terms of liability for debts. As of the announcement date, all debts will pass to the transferee.

According to Article 135 of TSY; "In the transfer of the commercial enterprise, the relevant registries are immediately notified by the directorate simultaneously with the registration of the transfer of the commercial enterprise, in order to ensure that the goods and rights registered in the land registry, ship and intellectual property registries and similar registries included in the assets of the transferred enterprise are registered in the name of the transferee without delay."

Notification to the trade registry must be made by the transferee. The legal liability of the transferee will begin with the notification. Joint liability will be deemed to have started when the transfer is notified to the trade registry. The beginning of the 2-year responsibility is the date of announcement or notification.

NOTIFICATION OBLIGATION WITHIN THE FRAMEWORK OF COMPETITION LAW

According to Article 5 of the Communiqué on Mergers and Acquisitions Requiring Permission from the Competition Board;

" In a manner that produces a permanent change in control;

a) Merger of two or more undertakings or

b) Acquisition of direct or indirect control of all or part of one or more enterprises by one or more enterprises or one or more persons who currently control at least one enterprise, through the purchase of shares or assets, by contract or by any other means,

It is considered a merger or acquisition transaction within the scope of Article 7 of the Law."

In Article 7 of the same communiqué, regulations have been made under the title of mergers or acquisitions subject to permission. The relevant article is as follows. In a merger or acquisition transaction specified in Article 5 of this Communiqué;

a) The total turnover of the transaction parties in Türkiye exceeds one hundred million TL and the Turkish turnover of at least two of the transaction parties separately exceeds thirty million TL, or

b) In acquisition transactions, if the Turkish turnover of the asset or activity subject to transfer exceeds thirty million TL, and in merger transactions, if the Turkish turnover of at least one of the transaction parties exceeds thirty million TL, and if the world turnover of at least one of the other transaction parties exceeds five hundred million TL, permission must be obtained from the Board for the transaction in question to gain legal validity.

CANCELLATION OF COMMERCIAL BUSINESS TRANSFER SAVINGS

If the commercial enterprise is transferred fraudulently, the transfer will be deemed invalid. This claim can be made against anyone. In addition, the law provides, in some cases, the right to file a lawsuit for annulment of disposition against persons who act to steal property from creditors and harm creditors.

The action for cancellation of savings is based on Article 277 et seq. of the Execution and Bankruptcy Law. It is a type of lawsuit filed according to the articles.

In case the commercial enterprise is transferred for the purpose of stealing goods from creditors, the creditors will be subject to the provisions of Article 280/3 of the Bankruptcy Banking Law. They may file an annulment lawsuit according to the article. As a matter of fact, this issue was stated in a Supreme Court decision as follows: "In the concrete case, the factory real estate registered in the name of the defendant debtor company is subject to annulment in accordance with Article 280/3 of the Bankruptcy Code, since it is a transfer of company property." It is stated as follows. The lawsuit for annulment of the savings can be filed by the creditors whose claims have not reached fruition. Article 280/3 of the EBL. According to the article;

"It is accepted that the person who transfers or purchases all or a significant part of the commercial enterprise or the existing commercial goods in the workplace, or who acquires a part of it and subsequently occupies the workplace, knows that the debtor intends to harm his creditors, and that the debtor acts with the intention of harming his creditors in these cases."

As can be seen, a rebuttable presumption is regulated in the article. As a matter of fact, the 17th Civil Chamber of the Supreme Court of Appeals stated in a decision dated 2013 that "According to the 280/last paragraph of the Civil Code, the person who transfers or purchases all or a significant part of the commercial enterprise or the existing commercial goods in the workplace, or acquires a part of it and subsequently occupies the workplace, is aware of the debtor's intention to harm his creditors, and it is accepted that the debtor acts with the intention of causing harm in these cases, and the presumption is that only the one who files the annulment case." "It is not appropriate to make a decision in writing with incomplete examination, instead of making a decision based on the result, without overlooking the fact that it can be refuted by proving that the situation was notified to the creditor in writing at least three months before the date of transfer, sale or abandonment, or that it was announced through the Trade Registry Gazette by hanging visible signs in the place where the commercial enterprise is located; or, if this is not possible, by appropriate means to ensure the reconciliation of all creditors." He ruled as follows.

In addition, in order to file a lawsuit for cancellation of disposition, all or a significant part of the existing commercial goods in the workplace must be transferred. As a matter of fact, in a decision of the 17th Civil Chamber of the Supreme Court of Appeals dated 2011; "This being the case, in order to investigate the conditions of the commercial enterprise transfer specified in the reversal by the court, the assets and liabilities of the debtor G. Meşrubat Pazarlama Ticaret A.Ş. on the date of sale should be determined, it should be determined how much of the assets subject to the case constituted the company's assets at that time, how much of its paid capital was, and whether these immovable properties constitute the whole or a significant part of the commercial enterprise or the existing commercial commodities in the workplace within the meaning of 280 / last, and an award should be made according to the result." He stated it as follows.

In order to cancel the disposition, the creditor must have a certificate of insolvency. Proof of insolvency is not required in lawsuits filed against the claim of entitlement. In order for the lawsuit to be filed, the receivable must have arisen before the transfer process. With the action for annulment of disposition, the fraudulent dispositions made by the debtor in order to smuggle goods from his creditor become null and void against the debtor's creditor. The lawsuit is filed together against the transferor and the transferee.

RESULTS OF COMMERCIAL ENTERPRISE TRANSFER

1- Loss of Merchant Title during the Transfer of Commercial Enterprise

The person who transfers his commercial enterprise is deemed to have abandoned his business. If the transferor does not have another commercial enterprise, his title as a merchant ceases.

2- Transfer of Commercial Enterprise Transfer to the Transferee of the Elements Charged for Processing

It is accepted that the elements we have listed above are transferred to the transferee upon transfer. As we have explained in detail, it may be decided otherwise that some elements will be included in the transfer agreement.

3- Assumption of Debts in the Transfer of Commercial Enterprise

The transferee shall be liable for the debts of the assets or the business to the creditors, starting from the date on which the transfer of the business is notified to the creditors or, for commercial enterprises, announced with the announcement to be published in the Trade Registry Gazette. This liability is not a limited liability and continues until the statute of limitations expires. The transferee will also be responsible for debts that he does not know about.

4- Commercial Enterprise Transfer Joint and Joint Liability

In commercial enterprise transfers, debts are transferred to the transferee without the consent of the creditors. Since the rights of creditors may be jeopardized by this regulation, the legislator has regulated that the transferor will be jointly and severally liable for two years after the transfer. According to Article 202 of the Turkish Code of Obligations;

"Anyone who acquires an asset or a business together with its assets and liabilities shall be liable to them for the debts in the assets or business, starting from the date on which he notifies this to the creditors or announces it with an announcement to be published in the Trade Registry Gazette for commercial enterprises, or in one of the newspapers distributed throughout Turkey for others.

However,for two years the previous debtor remains liable as a joint and several debtor together with the transferee. This period, for overdue debts, is from the notification or announcement date; For debts that will become due later, it starts to be processed from the due date."

As can be understood from the article of the law, liability for overdue debts will start with the announcement date and last for 2 years. In terms of outstanding debts, the 2-year period will start when the debt becomes due. In the transfer of a commercial enterprise, the joint liability period is the limitation period. It is observed ex officio by the judge.

5- Transfer of Commercial Enterprise Warranty Against Defects and Memorandum

Commercial business transfer transactions are generally based on sales contracts. For this reason, warranty provisions against defects find application. 21/3 of the Turkish Commercial Code. According to the article, "If it is clearly obvious at the time of delivery that the goods are defective, the buyer must notify the seller within two days. If it is not obvious, the buyer is obliged to examine the goods or have them examined within eight days after receiving the goods, and if it is revealed that the goods are defective as a result of this inspection, he is obliged to notify the seller within this period in order to protect his rights."