Impact of reform on sale of corporate assets

The recently-enacted Law 31/2014 of 3rd December 2014, which reforms the Corporate Enterprises Act, reserves to the General Meeting of members or shareholders powers in relation to the acquisition, disposal or transfer to another company of “essential assets” (article 160, paragraph f). An asset is deemed to be essential when the amount of the transaction exceeds twenty five percent (25%) of the value of the assets appearing on the last balance sheet approved.

The transferee or transferor in relation to an asset (real estate, credit right, etc) of a certain value, property of a company with share capital, absolutely must request, from now on, information regarding compliance with the resolution of the General Meeting authorizing the transfer or the reasons for any exemption. Otherwise, said transferee or transferor might become embroiled in a subsequent legal dispute which could affect the validity of the legal transaction. This information is properly to be included in the sale agreement to satisfy the requirement of “good faith” on the part of the transferee which is essential for protection of the right to property.