If you are evaluating the possibility of carrying out a
business succession,
but you have different doubts about it, we recommend that you pay attention and take note.
Why? Because from AYCE Laborytax we tell you what you need to know to carry out the succession of your company with guarantees, as well as the requirements you must meet to face it and the possible consequences you would have to face.
What is business succession?
We speak of business succession when a company,work center or autonomous productive unit of the same, changes its ownership,causing a change in the figure of the entrepreneur.
A situation that in recent years is being carried out with great assiduity, due to the great economic problems that multiple companies face daily,and that cause serious difficulties to move forward.
In any case, it must be made clear that the succession of a company does not affect employees,since they will simply go on to serve another employer.
What the law does grant is the right to be informed.
Essential requirements to carry out a business succession
The Supreme Court states that, in order to guarantee the stability of employees after the succession of a company, two indispensable requirements must be met; one objective and one subjective:
> Objective requirement
The entire operating set of the essential elements that make up the company must be delivered,in order to guarantee that the main activity of said company will continue, and that it will be maintained as a unit with respect to its organizational and patrimonial technical factors.
> Subjective requirement
That the business succession has been represented by the direct transfer of the old entrepreneur by a new one, belonging to a different company.
This does not affect that the substitution is carried out by an interposed third party, since what is really important is that, both the previous entrepreneur and the new one, take charge of the business activity successively.
Consequences of business succession for the company itself
The succession of a company entails direct consequences for the company itself, since it may be the new management body that will have to respond to possible debts and labor obligations that the company previously maintained with respect to salaries, social contributions of self-employed and companies,compensation, etc.
It will be the assignor and the assignee who will have to respond jointly and severally during the three years after the business succession,of those labor obligations that appeared before the transfer was carried out, and that were not resolved.
In any case, this responsibility will not have to be declared judicially, since it may be the administration itself that determines the existence of succession, exercising collection actions against any of the parties. In addition, the Tax Agency can also claim outstanding debts.
A very common situation that occurs when the business succession is carried out due to bankruptcy of a company, is that both the entrepreneur himself and one of his partners try to continue with the activity of the company, through a different business model or simply using another name.
Consequences of succession for employees
Upon succession, the company’s employees would continue to maintain both their seniority and the conditions they enjoyed in their jobs.
It is an indispensable requirement that the new company respects each and every one of the commitments acquired when succeeding the previous company.
With regard to the applicable collective agreement, the one that existed would also be maintained until the transmission took place, and until a new agreement entered into force.
In addition, both the assignor and the assignee should provide all facilities to employees to be duly informed in relation to the transfer of the enterprise.
- Expected date for the transfer of the company.
- Reasons for the transmission.
- Legal, economic and social consequences for workers after transmission.
- Measures envisaged with regard to workers.
It is important that all this information is transmitted well in advance,although there is no specific deadline in this regard.
And in cases of merger or division of companies, it will be necessary to provide all the information while the call for the new general meeting is published.
conclusion
the
business succession
is a complex operation with multiple aspects that, although it is being carried out with great assiduity in recent times in the business world, must be studied carefully before carrying it out to ensure compliance with all requirements,and avoid negative consequences for both the company and the workers.
Is your company facing a situation that requires a business succession? Consult with the advisors of AYCE Laborytax and leave doubts about the procedures and decisions to be made.
