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transactions is realized by the transfer of possession of the registered
share certificate that has been validly endorsed.
On the other hand, Art. 11/3 TCC regulates that a
commercial
enterprise
can be transferred as a whole that will not necessitate con-
ducting the legally required transactions for the transfer of each asset,
separately. According to this provision, the transfer agreement shall be
in written form, and registered, and announced with the trade registry,
and unless otherwise specifically indicated, is considered as covering
the fixed assets, enterprise value, tenancy rights, trade name, and other
intellectual property rights, and other assets that are permanently
attached to the business.
Transfer Procedures
In a share deal, the entire business of the target company, includ-
ing, but not limited to the assets, agreements, permits and licenses, the
employees and liabilities are subject to transfer, while the buyer
acquires the shares of the target company. In other words, if there are
assets or other elements of the target company that are not intended to
be covered by the transfer, then these should be carved out from the
company through separate legal transactions prior to the share transfer
transaction, and to procure this result, such an undertaking should be
regulated as a condition precedent or a pre-completion covenant under
the sale and purchase agreement.
On the other hand, in an asset deal where there is a transfer of busi-
ness, as indicated in Art. 11/3 TCC, unless otherwise specifically set
forth under the written contract, the elements of business (i.e.
the fixed
assets and other assets that are permanently attached to the business,
enterprise value, tenancy rights, trade name and other intellectual
property rights
) are deemed to be included in the transaction. In other
words, the parties of the transaction have a certain degree of freedom
of contract as to which assets and other elements are to be included in,
or carved out from, the sale and purchase transaction, provided that the
entirety of the business is preserved within the transfer transaction. The
Trade Registry Regulation
3
(“TRR”) sets forth that the integrity of the
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NEWSLETTER 2014
3
Official Gazette, 27.01.2013, P. 28541.