Global transfer of assets and liabilities in Spain

The global transfer of assets and liabilities is a legal transaction whereby a company transfers its assets and liabilities en bloc to another entity.

In Spain, this operation is defined and regulated in Law 3/2009 of 3 April on structural modifications of commercial companies, which not only establishes the procedure to follow for its implementation but also differentiates it from other restructuring instruments, such as the transformation, merger and spin-off of companies (see article).

Definition of global transfer of assets and liabilities

According to Article 81 of said Act, a registered company may transfer its entire assets and liabilities en bloc by universal succession to one or more shareholders or third parties, in exchange for a consideration which may not consist of shares, holdings or membership fees of the transferee.

From this definition, we can extract the elements that make up the figure of the global transfer of assets and liabilities:

The parties involved

The global assignment of assets and liabilities involves the participation of two parties:

• The transferor company duly registered in the Commercial Register.
• One or more transferees, natural or legal persons, who will receive the assets transferred.

The object of the assignment

To return to the definition, the transferor assigns en bloc all his assets by universal succession.

Law 3/2009 refers to the economic unit, also known as the branch of activity in the tax field.

According to article 85.1.3, the economic unit is the set of assets to transfer to each transferee.

From a tax perspective, a branch of activity is understood as consisting of the set of assets and liabilities that are capable of constituting an autonomous economic unit determining an economic operation, i.e. a set capable of operating by its means (Article 76.4 of Law 27/2014, of 27 November, on Corporate Income Tax).

From the reading of the different notions, we can conclude that the global assignment of assets and liabilities has as its object a set of assets and liabilities (assets) organized and susceptible to exploitation or business exploitation by the assignee.

Consideration for the transfer

A global transfer of assets and liabilities means that the transferee may only hand over money, goods or rights to the transferor, but under no circumstances, shares, holdings or quotas.

This legal prohibition is essential to distinguish the global transfer of assets and liabilities from other structural modifications, such as mergers, and spin-offs.

Types of global transfer of assets and liabilities

In Spain, the Law establishes different types of global transfer of assets and liabilities:

• Plural global transfer: when the transfer of assets is to two or more transferees, each of whom must form an economic unit
• Global transfer by companies in liquidation occurs when the transferor company is in liquidation, provided that the distribution of assets among the partners has not yet begun
• International global transfer refers to the transfer of employees between companies of different nationalities, and the relocation is subject to the laws of each country involved.

Procedure for the global transfer of assets and liabilities

Akin to transformation, merger, and spin-off operations, Spanish Law outlines a specific procedure for the global transfer of assets and liabilities. In this case, the process is relatively simple, as it only involves modifying the structure of the transferor company and, more specifically, the composition of its assets and liabilities.

Article 85 et seq. of the Capital Companies Act establishes the steps to follow:

• Firstly, the directors of the transferor company must first prepare a global transfer project that explains and justifies the process
• Next, the shareholders’ meeting must approve the transfer, which will be published and communicated through the Official Gazette of the Commercial Registry or by written communication to all shareholders and creditors of the company. The Law also requires making available the draft global transfer and the administrators’ report to the workers’ representatives
• Finally, the parties must formalize the agreement in a notarial deed and register it in the Commercial Registry of the transferor company.

It is worth noting that this business transaction does not require a report from an independent expert or a merger balance sheet in the case of a joint stock company or limited joint-stock company. For this reason, it has become a frequent option in the transfer of companies. Additionally, it is a permitted method for winding up companies.

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