Sale of the company - everything you need to know!


Pursuant to the Civil Code, the entrepreneur operates under the name of the company. It distinguishes an entrepreneur on the market and can often constitute quite a lot of value. What is a company within the meaning of the regulations and can the entrepreneur dispose of it freely? Is it possible to sell the company? You will find out in the article below!

What is a company?

The company of a natural person is their first and last name. This does not exclude the inclusion of a pseudonym or terms indicating the subject of the entrepreneur's activity, place of conduct and other terms freely chosen.

The company name of a legal person is its name. It specifies the legal form of a legal person, which may be abbreviated, and may also indicate the subject of activity, seat and other terms freely chosen.

The company of a legal person may contain the name or pseudonym of a natural person if it serves to show the relationship of that person with the establishment or activity of the entrepreneur. Placing the name or pseudonym of a natural person in a company requires the written consent of that person, and in the event of their death - the consent of their spouse and children.

The entrepreneur's company should be sufficiently different from the companies of other entrepreneurs operating in the same market. It may not be misleading, in particular as to the person of the entrepreneur, the subject of his business, place of business or sources of supply. The company is the name of the entrepreneur. It works underneath it. It includes his name and surname or name and the legal form of the business. The company is disclosed in the appropriate register, unless separate regulations provide otherwise. Currently, this takes place in the register of entrepreneurs of the National Court Register and in CEiDG.

Company rights are protected

An entrepreneur whose right to the company has been threatened by someone else's action may request that this action be discontinued, unless it is not unlawful. In the event of a breach, he may also demand removal of its effects, submission of a declaration or statements in the appropriate content and form, compensation on general principles of property damage or giving the benefit obtained by the person who committed the breach. The rights to the company are protected by law. For their violation, you can demand compensation and the release of benefits obtained from the use of someone else's company or removal of the effects of such use.

The company in the event of sale of the company or sale of shares

In the event of loss of membership by a partner whose name was placed in the company, the company may keep the name of the former partner in the company only with his written consent, and in the event of his death - with the consent of his spouse and children.

The above rules shall apply accordingly in the case of continuing economic activity of a natural person by another natural person who is his legal successor. The name of the former partner may be further used as part of the company only with his consent or with the consent of his legal successors. On the other hand, in the event of the acquisition of the enterprise, the buyer may continue to run it under the current name. However, he should put an addendum indicating the company or name of the buyer, unless the parties agreed otherwise.

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Permissibility to dispose of the company

The company cannot be divested as it is considered a type of personal right which by its nature is non-transferable. It is also recognized that the company cannot be charged with, for example, a lien. Taking the act of selling it or encumbering it will be invalid by operation of law. The company as a personal right closely related to the entrepreneur himself is inalienable. On the other hand, an entrepreneur may authorize another entrepreneur to use his company, if this is not misleading. In this case, a specific license agreement is usually concluded for its use. It is also possible to conclude, for example, a company lease agreement or a franchise agreement. It is worth noting that the law does not impose any additional formal requirements on such a contract.

The authorization of another entity to use the company depends on not being misled by such action. The point here is that the authorizing act should not mislead other market participants - contractors, customers, suppliers or other entrepreneurs.

It is worth noting, however, that the Civil Code distinguishes a company from a designation that individualizes the enterprise itself. However, such a designation may be sold together with the enterprise, as it is naturally related to it. The name as the designation of the company (not the entrepreneur itself) is not prohibited from sale. The company as a designation of a specific entity - entrepreneur, is inalienable. The name as a designation for a set of tangible and intangible assets that together constitute an enterprise - is transferable.

It is worth emphasizing once again that the company cannot be sold even together with the company - because it is associated with a specific entity (entrepreneur) and not with the property mass.

In specific cases, however, distinguishing the two concepts may be problematic and will require, in particular, attention to which elements making up the sign are strictly related to the person or company, and which are rather used to designate the company's activity.