Business takeover in Vienna — buying and selling a business

Key points

• Two basic forms: an asset deal (purchase of individual assets) and a share deal (purchase of company shares; the business remains the same legal entity). The choice has tax and liability consequences, which your tax adviser clarifies case by case.
• The trade licence is tied to the person. Anyone buying a business registers their trade themselves (§ 339 GewO); a right to continue operating (Fortbetriebsrecht) under § 41 GewO is held only by certain persons, such as the deceased's estate or the surviving spouse.
• The operating facility permit remains valid when the owner changes: "A change in the person of the holder of the facility does not affect the validity of the permit" (§ 80 Abs 5 GewO).
• Employees transfer to the new owner with all rights and obligations when the business is transferred (§ 3 Abs 1 AVRAG).
• In an asset deal, the lease of the premises passes to the buyer under § 12a MRG if the MRG applies in full; the landlord can then demand an increase to the appropriate rent.
• We are estate agents — not credit intermediaries and not tax advisers.

What is a business takeover?

Definition: A business takeover (Betriebsübernahme) is the acquisition of an existing business or part of a business by a new owner — either by purchasing individual assets (asset deal) or by purchasing company shares (share deal), each with its own consequences for the lease, the trade licence and the employees.

In an asset deal, the buyer acquires the individual assets of the business; the transfer of contracts and liabilities is governed by the rules of the Business Code (Unternehmensgesetzbuch, § 38 UGB). In a share deal, company shares are transferred; the business continues to exist as a legal entity, only the owners change. Which option makes more sense in a particular case depends on tax and liability questions — you clarify these with your tax adviser.

What transfers in a takeover — and what does not

Lease: If the business is continued in the same premises, the buyer takes the place of the previous main tenant (§ 12a Abs 1 MRG); both must notify the landlord of the sale without delay. If the main rent was below the appropriate rent, the landlord can demand an increase within six months. In a share deal, the company remains the tenant — if control changes decisively, for example through the sale of the majority, the landlord can also demand the increase (§ 12a Abs 3 MRG). Both apply within the full scope of the MRG; more on this in Retail unit to rent or buy.

Trade licence: This is the most common stumbling block. The trade licence is tied to the person and cannot be transferred. Anyone buying a business files their own trade registration (Gewerbeanmeldung) with the district administrative authority for the location (§ 339 GewO) — even if the business carries on unchanged in substance. A right to continue operating (Fortbetriebsrecht) on the basis of the previous licence is held under § 41 GewO only by certain persons: the deceased's estate, the surviving spouse or registered partner, children until they reach the age of 24, the insolvency estate, and a court-appointed receiver or compulsory lessee. An ordinary buyer is not one of them.

Operating facility permit: Unlike the trade licence, it is attached to the facility, not the person, and remains valid when the owner changes (§ 80 Abs 5 GewO). No new permit is needed for that — but one is needed if the new owner significantly changes the facility or its operation.

Employees: If a business, establishment or part of an establishment passes to another owner, the new owner enters the existing employment relationships as employer with all rights and obligations (§ 3 Abs 1 AVRAG). This does not apply in the bankruptcy (Konkurs) of the transferor or in restructuring proceedings without self-administration. Employees can object to the transfer if the acquirer does not take over the protection against dismissal under the collective agreement or company pension commitments (§ 3 Abs 4 AVRAG).

How a business takeover works with ImmoLöwin

1. Initial meeting and confidentiality agreement — before any business data is exchanged.
2. Exposé — an anonymised presentation of the business for serious prospective buyers.
3. Viewing — on site, after the confidentiality agreement has been signed.
4. Letter of intent — records the key points before the actual contract; as a rule it is non-binding.
5. Due diligence and contract — due diligence and signing of the contract together with your tax adviser and lawyer.

Businesses and investment properties we are currently offering are under Investing and Commercial.

What we need from the seller

Buyers and their advisers want to see the economic substance of the business. Usual are the annual financial statements for the last few years, the lease for the business premises, an inventory list and the existing decisions on the operating facility. Exactly what is needed depends on size and sector; we agree this with you before the exposé is prepared.

You discuss financing questions with your bank and tax questions — in particular asset deal or share deal — with your tax adviser. We coordinate the process and bring the right parties together.