Libro III Título III. De la empresa mercantil y de sus elementos

A commercial enterprise is understood as the set of labor, material elements and incorporeal values coordinated, to offer the public, with profit purpose and systematically, goods or services.

The commercial enterprise shall be regarded as movable property.

The transfer or encumbrance of its immovable elements shall be governed by the rules of ordinary law.

The transfer of an enterprise shall be made in accordance with the formalities established for the merger of companies if the transferor is a company. If he is an individual merchant, the last balance sheet and the system established for the extinction of the liabilities must be published in the Official Gazette and in another of the newspapers of largest circulation in the country, with the anticipation and in the form and for the purposes indicated in article 260.

Every contract over a commercial enterprise, which does not express the elements of it that have been taken into account, shall comprise:

1º.The establishment or establishments thereof.

2º.The clientele and the commercial goodwill.

3º.The trade name and the other distinctive signs of the enterprise and of the establishment.

4º.The lease contracts.

5º.The furniture and the machinery.

6º.The employment contracts.

7º.The merchandise, the credits and the other similar goods and values.

Only by express agreement shall invention patents, manufacturing and business secrets, exclusivities and concessions be included in the contracts to which this article refers.

Unless otherwise agreed, whoever acquires an enterprise is subrogated in the contracts entered into for the exercise of the activities proper to it that are not of a personal nature.

The third-party contracting party may, however, terminate the contract within the three months following the publication of the transfer, if there is just cause for it and without prejudice to the liability of the transferor.

The same provisions shall apply in relation to the usufructuary and the lessee of an enterprise.

The assignment of the credits related to the transferred enterprise, even if the debtor is not notified or does not accept, shall have effects against third parties from the moment of the registration of the transfer in the Mercantile Registry. However, the debtor shall be released if he pays in good faith to the transferor.

The same provisions shall apply in the case of usufruct or lease of the enterprise, if it extends to the credits relating to it.

The transfer of an enterprise implies the transfer of the debts contracted by the previous holder in the operation thereof. Any agreement to the contrary shall be null.

However, during the year following the publication mentioned in article 656 of this Code, the liability of the transferor shall subsist, without the substitution of debtor producing effects with respect to the creditors who, during said period, express their disagreement.

The attachment order against the holder of a commercial enterprise may only fall upon it as a whole or upon one or several of its establishments, through the appointment of an intervener who shall take charge of the cash box to cover the ordinary or indispensable expenses of the enterprise, and keep the remainder at the disposal of the authority that ordered the attachment.

Nevertheless, the money, the credits or the merchandise may be attached, insofar as the normal operation of the commercial enterprise is not impaired.

When a commercial enterprise ceases to be operated for more than six consecutive months without its nature justifying it, it shall lose that character, and its elements shall cease to constitute the unit that this Code recognizes.

Whoever transfers an enterprise must abstain, during the five years following the transfer, from starting a new one that, by its object, location and other circumstances, may divert the clientele of the transferred commercial enterprise, constituting unfair competition, unless otherwise agreed.

In the case of usufruct or lease of an enterprise, the prohibition of competition is valid against the owner or the lessor, for the time the usufruct or the lease lasts.

The usufructuary must operate the enterprise without modifying its destination, in such a way that he preserves the effectiveness of the organization and of the investments and normally attends to the stocking of its inventories. The difference between the inventories, according to inventory at the beginning and at the end of the usufruct, shall be settled in money, in accordance with the current values at its conclusion.

The previous provisions are applicable to the case of lease of the enterprise.

The change of premises of the principal establishment must be made publicly known by a notice that shall be published in the Official Gazette; it must also be registered in the Mercantile Registry. The lack of publication gives the creditor the right to demand damages.

If the change causes a notable and permanent diminution of the value of the establishment, or is made from one place to another, the creditors may declare their credits due.

No attachment may be dispatched without a prior judicial declaration of the existence of the diminution of value.

The action may be brought from the date of the change, until ninety days after its registration in the Mercantile Registry.

The holder of the enterprise may provide sufficient guarantee, in which case the proceeding shall not proceed, or, if it has already been initiated, it shall be terminated.

The closure of an establishment shall declare all the liabilities affecting it due.

Everything relating to trade names, trademarks, notices, advertisements and invention patents, as well as the rights they grant, shall be governed by the special laws on the matter.