Business transfer (art. 181 CO, Switzerland)

The business transfer, known in Swiss practice as remise de commerce, corresponds in essence to the sale of a Business goodwill (business goodwill) in French law: the transfer of a business to a buyer. It is governed by article 181 of the Swiss Code of Obligations, which regulates the taking over of an estate or a business with its assets and liabilities. Swiss logic differs on one major point from French law, where the sale of a fonds de commerce does not transfer the debts.

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Under article 181 CO, whoever takes over an estate or a business becomes debtor of the debts as soon as the transfer is communicated to the creditors, without their individual consent being required. The former debtor nonetheless remains jointly liable with the transferee for a set period, which protects creditors against a transfer that would harm them. This assumption of debts by operation of law is a structuring difference from the French Asset deal.

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For example, a craftsman takes over a workshop in Geneva with its machines, stock and contracts. Under article 181 CO, he becomes debtor of the business's debts as soon as the transfer is communicated to creditors, the former operator remaining jointly liable for the legal period.

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The business transfer therefore requires a precise inventory of the assets and liabilities transferred and particular attention to the scope of the takeover. In practice, the choice between a business transfer and a sale of the company's shares is a matter of combined legal, tax and financial analysis, specific to each situation, in business valuation.