Comprehensive legal due diligence of a company in Europe and information disclosure are a mandatory and very important part of most transactions for the purchase of a ready-made business in Europe. A common practice is the transfer of significant amounts of information about both the business itself and its employees. This article focuses on the key features of how the data transfer process occurs, and how to protect it during the company sale in Europe.
Data protection issues must be addressed at the beginning of a comprehensive audit and disclosure. It is not worth delaying this, since delay can lead to unpleasant consequences.
Selling a business in Europe: key features
If you want to sell a European company, check out the following guidelines. Do not forget that only the seller of the business is fully responsible for the target business personal data maintenance, as well as for its disclosure.
Information protection when selling a business is equally important for its future owner as well. The company may lose its attractiveness to potential buyers if confidential data were disclosed to third parties who contacted the seller with a request for additional information.
In addition, not all buyers are truly interested in acquiring your business. Reasonable precautions when disclosing information will help weed out those who do not initially plan to purchase, and will not waste time, and will also protect against the use of confidential information by dishonest buyers.
In order to protect personal data in a company in Europe, you need to know the rights to legally handle it in accordance with applicable General Data Protection Regulation (GDPR). As a result of improper disclosure of personal data, it must be borne in mind that sanctions may follow.
What data should not be disclosed?
Obviously, the transaction requires the provision of reliable information that will allow the buyer to verify the feasibility of the investment. But when disclosing information, you should be careful.
Before sending to the counterparty, all personal data must be anonymized. For example, instead of specific contracts with employees, loading empty model contracts is perfectly acceptable. However, not everything is so simple with the rest of the data. Consulting a lawyer on compliance with the rules on the personal data protection in the EU will be very helpful to find out how and what documents you can provide before selling a European company.
Special Category Data
The most appropriate legal basis for the information disclosure is likely to be the legitimate interests of the potential buyer. Therefore, it is recommended to assess the legitimate interests in Europe and record it in writing. Then the need for the processing of personal data will be justified.
There are special categories of personal data that require utmost care in processing to ensure that the risk of their disclosure is om the minimal level. The examples of such sensitive data are the data on health, or on racial, ethnic origin, etc.
Theoretically, individuals should be notified in advance that their personal data may be disclosed to a potential new business owner. However, in practice, it is very difficult to do. That is why, confidentiality notices will generally refer to the potential need for the transfer of personal data in the context of upcoming processes related to the sale of a business in the EU.
In such matters, legal support is indispensable. Highly qualified IQ Decision UK lawyers will advise you on how to act and what to do first. Request an individual legal consultation on the disclosure rules in Europe so that your transaction goes smoothly.