The question “when selling the company, how are employees and licences handled” contains a premise to undo immediately: in a capital transfer (buying capital contributions/shares), the enterprise legal person does not change — only its owners change. The legal consequence is very neat: labour contracts have nothing to “hand over” because the employer remains the very same company, and sub-licences granted to the company remain the company’s. This article explains that mechanism, distinguishes it from asset deals and restructuring under Article 45 of the Labour Code, and identifies the owner-conditioned licences a buyer still has to handle.
1. Labour contracts in a capital transfer: no employer change, no handover
The employer in every labour contract of the company is the company legal person itself — not its members/shareholders. When capital is transferred, the shareholders change but the legal person signing the labour contracts keeps its legal identity, enterprise code, social insurance account and every running relationship. Therefore: all employees’ labour contracts continue in full force on the same terms (salary, title, seniority, accrued leave), with no re-signing, no “handover” addendum, and no procedure notifying a change of employer to labour or social insurance authorities. Employees’ working seniority counts continuously because the employer has not changed. The two-way consequence both deal sides must understand: the buyer “inherits” the entire workforce and every accumulated labour obligation of the company (wage arrears if any, unused leave funds, insurance duties, pending labour disputes) — which is why labour due diligence is a mandatory workstream in a share deal; and a buyer wanting to change labour conditions post-deal (restructuring, salary policy changes) must go through the ordinary labour contract amendment and internal labour rule mechanisms — being the new owner is not itself a legal basis to change agreed labour conditions.
2. Distinguishing asset deals and the Article 45 Labour Code cases
A labour “handover” mechanism truly appears only when the employer entity changes or the enterprise restructures as a legal person: enterprise asset deals (the asset buyer re-hires employees under new contracts or tripartite arrangements), and cases of enterprise division, separation, consolidation, merger, or transfer of ownership/asset use rights under Article 45 of the Labour Code 45/2019/QH14 — in those cases, the employers (old and new) must build a labour use plan: lists of employees continuing in work, employees to be retrained, employees retiring, employees whose contracts terminate, with severance/job-loss allowance responsibilities for those not retained as prescribed. In a pure capital transfer, none of these procedures is triggered because no legal-person event occurs. The practical intersection to note: many “capital transfer” deals are bundled with post-deal operational restructuring (merging the target into another buyer company, spinning off a business line) — that later restructuring step is what activates Article 45 and the labour use plan, and it must be planned as a separate transaction with its own timetable, not merged into the capital transfer procedure. Buyers should also check key employees’ labour contracts: change-of-control clauses in contracts with directors/senior managers, non-compete agreements and retention commitments are separate contract matters — no statutory mechanism automatically keeps key people after the company changes owners.
3. Sub-licences: attached to the legal person they stay; attached to owner conditions they must be handled
The general principle: sub-licences (conditional business line licences, activity eligibility certificates) are granted to the enterprise legal person — a capital transfer does not change the legal person, so the licences do not automatically lapse and need not be “transferred into the buyer’s name” (the buyer is not the licensed subject; the company is). But this general principle has three exception groups that due diligence must screen licence by licence: group 1 — licences with ownership-structure conditions: some sectors place foreign ownership ratio or shareholder status conditions within the licensing conditions themselves (for example services with foreign ownership caps) — a transfer making the ownership structure breach the condition puts the licence at suspension/revocation risk even though the legal person is unchanged; group 2 — licences with change notification/reporting duties: many licence regimes require the enterprise to notify or amend information upon changes of legal representative, major shareholders, or professionally responsible managers — skipping this duty breaches licence maintenance conditions; group 3 — personally attached certificates: individuals’ practising certificates (lawyers, auditors, professionally responsible persons in healthcare, construction…) belong to that individual, not the company — if the certificate holder the company’s operations depend on leaves after the deal, the company loses the personnel condition of its licence even though the licence document remains. The correct approach: catalogue every sub-licence of the target company, screen each against the three groups, and place the necessary notification/amendment/personnel-supplementation procedures into the deal’s completion conditions or post-completion work list.
4. Employees “unwilling to stay with the new owner”: the real legal picture
Because the employer does not change, an employee has no right to unilaterally terminate the contract on the ground that the company changed owners and claim compensation — an ownership “change of owner” in a share deal is not a legal event in the labour relationship. Employees retain their ordinary unilateral termination rights under the Labour Code (notice per the statutory periods by contract type), and when they terminate lawfully, allowances follow the general rules (severance for qualifying service periods not covered by unemployment insurance, under the current mechanism) — there is no separate “change of owner compensation”. In the reverse direction, a post-deal buyer may not mass-dismiss employees on the ground of the ownership change either: contract termination needs a statutory basis (structural/technological change or economic reasons under Article 42 of the Labour Code with the full labour use plan procedure and notification to the labour authority; or other unilateral grounds as prescribed). On management practice, what well-run deals do is communicate early and clearly to employees — commitments on continuity of contracts, salary and benefits — because a share deal’s largest labour risk lies not in the law but in key staff resigning on their own during the uncertainty period. In short: a capital transfer leaves both the workforce and the licence system of the company intact at the legal-person level — and precisely that “intactness” is why the buyer must diligence these two areas as carefully as the financials, because every accumulated obligation within them travels with the company into new hands.
When the company is sold, how are employees’ labour contracts handled?
In a capital transfer (share deal), there is nothing to “handle”: the employer — the company legal person — does not change, so all labour contracts continue in full force on the same terms with continuous seniority, no re-signing, no handover procedure. The labour use plan procedure under Article 45 of the Labour Code 45/2019/QH14 arises only on division, separation, consolidation, merger or transfer of enterprise assets/ownership rights changing the employer entity — or when the buyer restructures the legal person after the deal.
Do sector sub-licences automatically transfer to the buyer?
The question needs reframing: sub-licences are granted to the company legal person, not to the owner — so there is no “transfer to the buyer”; the licences remain the company’s and continue in force after a capital transfer. But three exceptions must be screened: licences with foreign ownership ratio/shareholder status conditions (a new structure breaching the condition puts the licence at risk); licences with duties to notify changes of major shareholders/legal representative/professionally responsible persons; and practising certificates attached to individuals who may leave after the deal.
Must licences be re-issued in the new owner’s name?
No. Sub-licences do not bear the owner’s name but the licensed enterprise legal person’s name, so a capital transfer triggers no licence re-issuance. What must be done is: notify/amend licence information if that licence’s regime requires it upon changes to registered particulars (legal representative, location, professionally responsible person), and ensure the licence maintenance conditions (capital, facilities, certificated personnel) remain satisfied after the ownership structure changes.
If employees do not agree to stay with the new owner, what compensation do they get?
The law has no separate compensation regime for “not agreeing to stay” in a capital transfer, because the employer does not change and this is not a legal event in the labour relationship. Employees keep ordinary unilateral termination rights under the Labour Code (notice per statutory periods) and receive allowances under the general rules upon lawful termination. Conversely, the buyer may not dismiss on the ground of the ownership change either — termination needs a statutory basis, and structural/economic reasons must go through the Article 42 Labour Code procedure.
