Buying a Business Without Inheriting Its Debts: What Ley 2.904 Actually Protects

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Buying a Business Without Inheriting Its Debts: What Ley 2.904 Actually Protects

Buying a business that's already up and running beats building one from scratch. But it raises an uncomfortable question: what happens if creditors, unpaid taxes or claims tied to the previous owner's activity surface after you've already paid?

Uruguay has a legal procedure designed to shrink that risk. Its tools are:

  • Creditor notices under Ley N.º 2.904.
  • A registered promise of sale (a pre-closing contract recorded in the public registry).
  • Special clearance certificates from DGI (Uruguay's tax authority) and BPS (Uruguay's social-security agency).
  • Accounting, employment, contractual and registry review.
  • Holdbacks, guarantees and indemnities negotiated with the seller.

And one warning worth absorbing at the outset: none of these, on its own, guarantees a "debt-free" purchase. What they do is let you identify liabilities, draw the boundaries of who owes what, and decide what gets paid, what gets held back and what has to be cleaned up before closing.

First: what exactly are you buying?

Before talking about notices, you need to separate two very different transactions.

Buying the business itself (the establecimiento comercial, or going concern). What transfers is the organized bundle that makes the business work: inventory, equipment, trade name, customer base and whatever else the contract spells out. This is the transaction governed by Ley 2.904 and Decreto-Ley 14.433.

Buying shares or membership interests. Here the owner of the business doesn't change — the owners of the company do. The company remains the same legal entity, with its assets, contracts, employees, taxes and liabilities intact. Buying its shares erases nothing and does not trigger the protections of Ley 2.904.

Settle this distinction with your attorney, escribano (Uruguayan notary, who handles conveyancing) and accountant before you negotiate price, not after.

What the Ley 2.904 notices actually do

Ley N.º 2.904, on the books since 1904, requires that the sale of a going business be preceded by public notices to the seller's creditors.

The notices run for 20 days. Since Ley N.º 5.418, they must appear in two publications: the Diario Oficial (Uruguay's official gazette) and one other paper of the party's choosing.

Creditors then have 30 days, counted from the day after the first publication, to file their claims at the address given in the notice.

One practical point that heads off a common scheduling mistake: the two periods overlap. You don't add 20 + 30 to get 50 days. The creditor window closes roughly 30 days after the first publication, provided the notices were published correctly.

What the buyer is still on the hook for after publishing

Once the notices have run and the deadline has passed, article 2 makes the buyer jointly and severally liable with the seller for:

  • Debts recorded in the business's books.
  • Claims filed within the legal deadline.

The publications don't make those debts disappear. They tell you which ones follow the buyer.

Whatever surfaces gets dealt with at closing. Depending on the case, that means paying the debt before the deed is signed, withholding the amount from the remaining purchase price, depositing or escrowing it, making closing contingent on its cancellation, or negotiating extra security from the seller.

A debt that is not in the books and was not filed falls, in principle, outside article 2 liability. But don't stretch that conclusion too far: it does not automatically extend to tax, employment or social-security obligations, to fraud scenarios, or to other special regimes.

What happens if you skip the notices

Article 3 is far harsher.

If the sale closes without completing the publications, or before the 30 days expire, the buyer is jointly and severally liable for:

  • All debts the seller incurred before the transfer.
  • Any the seller keeps incurring for as long as the publications remain incomplete.

And article 4 adds that, where that liability applies, enforceable instruments against the seller are equally enforceable against the buyer.

Translation: closing first and "sorting out the notices later" can leave you exposed to liabilities that were never priced in. It's the most expensive shortcut in this entire transaction.

Fraud against creditors still matters

Article 5 points to article 229 of the Código de Comercio (Uruguay's commercial code), which covers transfers made by an insolvent debtor to defraud creditors. Where the sale is for consideration, reversing it also requires proof that the buyer knew about the fraud.

The notices are not a license to ignore obvious red flags. If the price is abnormally low, the seller is withholding information, there are attachments on record, or money is being routed to dodge creditors, the deal needs a closer look — and probably a different answer.

A registered promise protects against later acts

Decreto-Ley N.º 14.433 provides that a registered promise of sale gives the buyer an in rem right (a right good against third parties, not just the seller) against transfers, liens or attachments recorded after registration.

Registration takes place at the Registro Nacional de Comercio (Uruguay's national commercial registry), which also records transfers and attachments affecting going businesses (article 49 of Ley N.º 16.871).

Its limits are worth keeping in view:

  • It does not wipe out attachments, pledges or other acts recorded earlier.
  • It does not replace a title and registry search.
  • It does not guarantee that the seller is current with creditors, tax authorities or employees.
  • The registration has an expiration date that the escribano has to track.

The promise can be executed either as a public deed or as a private document with certified signatures, later entered into the notarial protocol. The final transfer, however, must be done by public deed.

DGI and BPS special certificates

If the prospective buyer takes possession, the date has to be recorded in a notarial certificate (acta notarial).

From that moment, a 15-day clock starts running to request the certificates required for the final deed. If the prospective seller fails to request them within that window, they can face a fine equal to 20% of the purchase price, without prejudice to being compelled to sign the deed — and the buyer or the professional handling the deal is then entitled to request the certificates directly.

That nuance matters: the clock starts when the buyer takes possession, but the fine lands on the seller.

For the sale of a going business, official sources point primarily to the DGI special certificate and the BPS special certificate.

Standing with BSE (Uruguay's state insurance company) also gets reviewed where there are employees, mandatory policies, workplace accidents or pending claims. But it shouldn't be presented as a universal requirement in every purchase without looking at the specifics.

What if the certificates take forever?

The agencies have up to 180 days from the request to issue them.

If no final assessment has been made by day 150, the agency then has 30 days to issue a provisional one.

If those deadlines pass with neither certificate nor assessment, Decreto-Ley 14.433 allows the parties to estimate the debt and deposit that amount with the collecting agency; if the agency won't accept it, the funds can be deposited with BROU (Uruguay's state bank).

That receipt counts as the certificate for purposes of executing the transfer, and it releases the buyer and the escribano from the joint liability that mechanism might otherwise create.

It's not a shortcut: it only applies when the statutory conditions and deadlines have genuinely been met.

The article 22 tax-liability cap

Tax liability runs on its own track.

Article 22 of the Código Tributario — Uruguay's tax code, enacted as Decreto-Ley 14.306 — provides that anyone acquiring a commercial business is jointly and severally liable for their predecessor's tax obligations.

With two limits:

  • Liability is capped at the value of the assets received, unless the buyer acted with intent to defraud.
  • It expires after one year from the date the collecting agency learned of the transfer.

Watch that last point. The statute does not say that requesting the certificate is the only way to put the agency on notice, nor does it let you simply assume when the year started running. That's why the notice of the transaction and every filing made with each agency should be carefully documented and dated.

Notices don't substitute for an employment review

If the business has staff, review it separately: the full payroll, hire dates and seniority, job categories and Consejos de Salarios groupings (Uruguay's sector-level wage councils), salaries, overtime, commissions and variable pay, leave, vacation pay and the aguinaldo (mandatory annual bonus), any administrative or court claims, workplace accidents, whether contributions and filings with BPS are current, the status of mandatory BSE coverage, and whether employment relationships are likely to continue after the transfer.

Employment liability can hinge on continuity of the business, of the staff, of the line of trade and on the facts on the ground. Publishing the notices does not settle it.

The lease

Buying the business is no guarantee you get to stay in the space.

Before you pay for goodwill, confirm who the current tenant is, how much term is left, whether assignment or a change of tenant is permitted, whether the landlord's consent is required, what commercial use is authorized, what security deposit or guarantee was posted, whether rent, common charges, taxes or utilities are outstanding, whether the landlord will sign a new lease, and whether any build-out work was properly authorized.

When staying put is essential — and in most lines of business it is — the deal should be made contingent on the landlord's approval or on signing a new lease.

Licenses, permits and contracts

Don't assume every permit travels with the name and the equipment. Depending on the line of business, you'll need to check the departmental operating license, fire department (Bomberos) sign-off, food-safety clearance (Bromatología), MSP (Uruguay's health ministry) approvals, environmental permits, sector licenses, supplier contracts, franchise or trademark license agreements, payment and delivery platforms, utility accounts, and ownership of the trademark, web domain and social media handles.

Some licenses belong to the premises; others belong to the person or entity that obtained them. A change of operator may require a fresh application or advance notice.

A recommended sequence

Your escribano sets the exact order, but a prudent process usually looks like this:

  1. Define what you're buying: the going business, specific assets, or equity in the company.
  2. Run the due diligence: books, taxes, employees, litigation, contracts, licenses, inventory and the premises.
  3. Search the registry: prior promises, pledges, attachments and ownership.
  4. Negotiate the promise: price, inventory, accepted liabilities, closing conditions, penalties, holdbacks and indemnities.
  5. Register the promise.
  6. Publish the notices for 20 days, in the Diario Oficial and one other outlet.
  7. Wait out the creditor window: 30 days from the day after the first publication.
  8. Document the handover of possession, where applicable, in an acta notarial.
  9. Request the certificates on time, above all the DGI and BPS special certificates.
  10. Resolve the liabilities you found: pay, hold back, escrow, secure or make closing contingent.
  11. Sign the final public deed.
  12. Register the transfer and complete the operational changes: DGI, BPS, contracts, licenses, insurance and utilities.

Contract protections worth negotiating

  • A detailed schedule of all debts.
  • A representation that there are no undisclosed lawsuits or claims.
  • A signed inventory of assets and stock.
  • A holdback on part of the purchase price for a set period.
  • The right to offset hidden liabilities against future installments.
  • An indemnity from the seller.
  • A personal guarantee or security interest.
  • A condition that a new lease be obtained.
  • A walk-away right if liabilities exceed a set threshold.
  • A ban on taking on new obligations outside the ordinary course before closing.

These clauses govern the relationship between buyer and seller. They do not extinguish rights that third parties or government agencies can assert by law.

Frequently asked questions

Do the notices make the debts go away?

No. They let you identify and bound the ones the buyer may be liable for. Recorded or filed claims still have to be resolved before or at closing.

How long does the Ley 2.904 process take?

Creditors have 30 days from the day after the first publication. The 20 days of publications run inside that period — they don't add up to 50. The certificates can take considerably longer, with a statutory limit of up to 180 days.

Does the promise have to be a public deed?

Not necessarily. It can be a private document with certified signatures, later protocolized. The final transfer does require a public deed.

Which certificates do I need to request?

At minimum, the DGI and BPS special certificates. Others depend on the owner, the line of business, the staff and the specifics of the deal.

Is the buyer liable for all tax debts?

There is joint and several liability, capped at the value of the assets received absent intent to defraud, and it expires one year after the collecting agency learns of the transfer.

Does buying the shares achieve the same thing?

No. The company is unchanged and keeps its debts and contingencies. It's a different transaction altogether.

How we support the transaction

At INGAR we don't replace your escribano, accountant or attorney. We support the negotiation of both the business and the lease, organize the information and keep the parties coordinated.

Before moving forward, our advice is always the same:

  • Work with an escribano chosen by the buyer.
  • Spell out precisely which assets and rights transfer.
  • Don't take possession without documenting what that triggers.
  • Don't pay the full price before you know the liabilities.
  • Make the purchase contingent on keeping the premises and the necessary licenses.
  • Put in writing what happens if undisclosed debts or claims turn up.

The goal isn't to trust that "the business is clean." It's to verify what you're buying, what obligations exist and how each risk is covered.

Before you start negotiating price, it's worth seeing what's out there: the businesses for sale we list include the line of trade, the location and the lease terms.

Keep reading

Sources

General information reviewed on August 1, 2026. It is not a substitute for notarial, legal, accounting or employment-law advice.

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