The Effect of Changes on the Company’s Taxation, Outstanding Loans and Company Debts

If the company’s assets and debts are transferred to the limited liability company at their book value and the company continues its nosiness as usual, then the company’s tax identity is maintained. No asset transfer tax is paid for the transferred property and securities, if the change is made in accordance with company law.

Once the change of the company form has taken place, the limited liability company cannot have any outstanding loans or other claims from those who have become shareholders, if the company’s own capital balance was negative on the last balance sheet. If such claims do exist, they must be paid to the company in connection with the change of the company form, or else they must be removed from the company in the form of asset transfers prior to making the resolution regarding the change of the company form. It is prohibited, upon changing the company form, to change and register own negative capital, e.g. into outstanding loans from the shareholders.

The ordinary partners of a partnership or a limited partnership are not freed from their liability for the company’s previous debts by reason of the company changing into a limited liability company, if the creditors have not given their consent. The creditors’ consent is required in order to transfer debts and loans to a limited liability company. It must be noted that the creditors usually require a personal security to be given. Otherwise the creditors’ positions weaken, when the partners are no longer personally liable for the company’s debts.

The creditors can be notified of the transfer by way of recorded delivery or in another verifiable way. If the creditor does not, within three months of having received the notice, inform the limited liability company that it opposes the ordinary partners’ release from their debt liability, then he/she will be regarded as having consented to the transfer. After the transfer, the limited liability company is solely liable for the debts. The limited liability company is solely liable for obligations which arise once the change of the company form has taken place.