Transfer of transport cards in the event of a merger of companies
In the business landscape, mergers and acquisitions are common strategies to drive growth, consolidate markets or improve the competitiveness of a company or group of companies. In particular, when these transactions involve companies in the transport sector, legal and operational challenges arise that must be managed with precision to avoid business disruptions. One of the aspects that takes on particular relevance is the proper transfer of transport cards in a company merger.
What are transport cards and why are they crucial?
Transport cards are administrative authorisations that allow companies to carry out freight or passenger transport activities. They are regulated in Article 42 and subsequent articles of Law 16/1987, of 30 July 1987, on Land Transport Organisation (LOTT) and in the Regulations of the Law on Land Transport Organisation (ROTT).
These cards are not only necessary to operate legally, but also guarantee that the company complies with legal requirements in terms of economic capacity, professional suitability and safety.
In a business merger, where two or more entities merge resulting in the emergence of a new company, or where one of them absorbs the other, the transfer of transport cards is a critical step.
Without such a transfer, the resulting new entity could find itself in legal default, which could lead to penalties, financial losses and the impossibility to operate after the restructuring operation.
Requirements for the transmission of transport cards
a. Notification to the competent authority
One of the first steps in the transfer of transport cards during a merger is the notification to the competent authority, usually the Ministry of Transport, Mobility and Urban Agenda or the corresponding Autonomous Community. The company resulting from the merger must communicate this to the authority, presenting the documentation proving the merger and requesting the transfer of the transport cards.
b. Fulfilment of economic capacity requirements
The company resulting from the merger must prove that it meets the requirements of economic capacity required by the regulations in force. This means demonstrating that the company has sufficient financial resources to carry out the transport activity. The economic capacity is assessed according to the number of vehicles and the activity to be carried out, and must comply with the thresholds established in the legislation.
c. Professional competence
Another essential requirement is professional competence, which consists of demonstrating that the company has a transport manager with the necessary certificate of professional competence to carry out the transport activity. This certificate must be in force and valid for the type of transport that the company intends to carry out.
d. Honourability of the company
The resulting undertaking must also comply with the requirement of good repute, which refers to the absence of serious convictions or sanctions related to the transport activity. The competent authority may refuse the transfer of transport cards if it considers that the company does not comply with this requirement.
e. Transfer of ownership of vehicles
Transport cards are associated with the vehicles with which the activity is carried out. Therefore, for the transfer of the cards to be effective, the ownership of the vehicles must also be transferred to the new entity resulting from the merger. This involves updating the documentation of the vehicles, including the Technical Inspection Card (ITV) and the vehicle registration certificate, among others.
f. Registration in the Register of Transport Businesses and Activities
Once all the above requirements have been met, the company resulting from the merger must register in the Register of Transport Companies and Activities regulated in Article 53 of the LOTT, which formalises the transfer of transport cards. This registration is necessary for the company to be able to operate legally in the sector.
Consequences of non-compliance with the duty to transmit transport cards
Once the merger operation has been registered in the Mercantile Register, the application for the transfer of the transport card must be submitted to the competent authority, which must decide on the granting of the card within the legally established period (for example, in the case of the Valencian Community, the period is five months from the date of registration of the application).
Failure to transfer the transport card to its new holder within the established deadlines and requirements is considered an administrative offence, which can range from 301 to 6,000 euros, depending on the characteristics of the authorisation that should have been transferred, and whether or not the application for its transfer has been made within the 15 days following notification of the start of the penalty proceedings, in accordance with the provisions of article 199.1 of the ROTT.
In addition, failure to transfer the transport card, or failure to transfer it properly, may lead to the revocation of the transport authorisation, which will mean that the new holder cannot legally operate the vehicles associated with the card. This may result in the immobilisation of the vehicles in transport controls and the impossibility of carrying out commercial freight transport activities, as well as the company’s inability to participate in public or private tenders or contracts because its ownership is not registered in the Register of Transport Companies and Activities.
Conclusion: transfer of transport cards in cases of company mergers
The transfer of transport cards in cases of company mergers is a process that requires compliance with various legal requirements designed to ensure that the company resulting from the merger is equipped with the necessary capacity to operate in the transport sector in a safe and legal manner.
In short, it is advisable that companies facing a merger process have specialised legal advice that pays special attention to issues such as those discussed in this article in order to avoid legal problems that could jeopardise the success of the business activity.
While the process can be complex, meeting the regulatory requirements is essential to ensure a successful transition and maintain operational continuity in the transport sector.
Do you need advice? Access our area related to the transfer of transport cards in case of company mergers: