Lining up the interests of both parties in terms of the legal form of the takeover (purchase of shares or business capital) is not always easy.
Different takeover options
In legal terms, a company takeover can take place using two fundamentally different methods: transferring shares or transferring "business capital" (a collection of assets), whether tangible or not.
The choice between the two types of transfer depends on whether the shareholders want to sell the company or transfer the commercial activity, the business capital, while keeping the company for other purposes.
It may also be that the buyer does not want to buy the shares, given the historic risks related to the company.
Remember that this choice is far from neutral when it comes to the fiscal consequences...
The shareholder holds shares in a company, and so can transfer the ownership thereof by means of a sale or a donation. The shares are part of the company's share capital and come with rights to vote, dividends, etc.
Remember that the transfer of shares from a company may be restricted by the law (in SPRLs), by statutes, or by shareholders' agreements (pre-emptive right, resale right, special categories, etc.).
Note: buying shares in a company means assuming all the related rights and obligations. It is a good idea for the buyer to focus their attention on covering certain company-related risks.
Transfer of business capital
In this case, it is the company itself which sells its business capital to a third party, namely: its commercial activity comprising assets, debts, personnel, know-how, customers, and all other rights and debt obligations related to this activity.
The takeover of business capital does not lead to the takeover of the entire history (indebtedness, guarantees, risks) related to this company.
The legal framework of a transfer
In the context of the company transmission process, a letter of intention is often signed, which is still not a firm commitment to buy, but sets out the negotiation terms. Tied to this letter of intention is a confidentiality agreement allowing the company up for sale to defend against the disclosure of confidential elements related to its commercial activity and its management.
During the transfer, the conclusion of a written agreement is highly recommended.
The ideal situation is to prepare the transfer through adequate documentation at the commercial, accounting, and legal levels to allow the buyer or their advisers to quickly understand the company's situation. Transparency facilitates an objective negotiation.
Prepare a "rock-solid" takeover agreement. Settling for a standard agreement would be a bad idea; here are some documents (FR) which may help.