I received grants with a commitment to keep the business or jobs: does selling my company force me to repay them, and how does it affect the price?

Quick answer

Capittal's view: selling your company does not by itself force you to repay public grants. If you sell the shares, the beneficiary is still the same company and the commitments to keep the activity, jobs or investments remain in force; the risk is that the buyer breaches them later. If you sell assets or a business unit, transferring subsidised assets or changing the beneficiary may require authorisation and can trigger repayment plus late-payment interest. Build an inventory of live grants before going to market: if it is not in order, the buyer will deduct the risk from the price or ask for guarantees.

Does selling the shares by itself force me to repay the grant?

Generally, no. The grant was awarded to the company, not to its shareholders. When you sell the shares, the beneficiary company remains the same legal entity, with the same tax ID, the same assets and the same obligations. The commitments it took on (keeping headcount for a period, maintaining the investment, continuing to operate in a given region) carry on exactly as before after the sale.

The exception lies in the grant terms themselves: some programmes, especially regional ones or those linked to public participating loans and EU funds, include change-of-control or change-of-ownership clauses that require you to notify the deal, seek authorisation, or that may lead to the grant being revoked. That is why the general rule is not enough: you need to read the award decision for each grant.

What if I sell assets or a business unit instead of the company?

Here the risk is higher. Spain's General Grants Act (Ley 38/2003, General de Subvenciones), article 31.4, provides that when a grant funds the purchase or improvement of fixed assets, the grant rules set a period during which those assets must be used for the subsidised purpose: no less than five years for assets registrable in a public registry and no less than two years for all others. Article 31.5 adds that breaching that use, which happens in any event when the asset is sold or encumbered, is grounds for repayment, except in specific cases such as an authorised replacement of non-registrable assets or an authorised sale of registrable assets; in that case, the acquirer takes on the use obligation for the remaining period.

In practice, selling a warehouse, a production line or a subsidised business unit without prior authorisation from the granting body can trigger repayment. And if the grant was tied to the beneficiary, a change of holder usually needs express authorisation that is not always given.

How much can they claim if a commitment is breached?

Article 37 of the Act lists the grounds for repayment, including total or partial failure to meet the objective, activity or project, and breach of the conditions imposed on the beneficiary. On top of the principal, late-payment interest is charged from the date the grant was paid until repayment is ordered. Under article 38, that rate is the statutory interest rate plus 25%, unless the State Budget Act sets a different one. Where the breach is partial, many grant rules scale the repayment to its extent.

Timing matters too: the authorities' right to claim repayment generally becomes time-barred after four years (article 39), counted from milestones set by the Act, such as the end of the reporting period or of the maintenance period. Your exposure can outlive the commitment itself.

What happens if the buyer closes the site or cuts jobs after the deal?

This is the real risk in most share sales. The buyer may have an industrial plan that clashes with the commitments: consolidating production in another plant, moving headquarters, merging teams and reducing headcount. If it does so before the maintenance period ends, the company will have to repay the grant, and the buyer will try to make the seller bear that cost unless the contract says otherwise.

So the purchase agreement should state clearly who is liable for what: breaches before closing belong to the seller; those caused by the buyer's later decisions should be the buyer's.

Which documents should I review before selling?

• The grant rules and call for applications for each grant.
• The award decision and any amendments.
• Change-of-ownership, change-of-control or shareholder clauses.
• Jobs, investment, activity or location commitments, with their end date.
• Status of the grant reporting: filed, accepted or pending review.
• Assets subject to the grant and, where relevant, the encumbrance note in the Land or Companies Registry.

How will the buyer treat it, and how does it affect the price?

In due diligence the buyer will ask for an inventory of grants received. Depending on what it finds, it will choose between several mechanisms: seller representations and warranties on compliance with the conditions, a specific indemnity for repayments arising from pre-closing facts, a price adjustment if it sees repayment as likely, or an escrow holdback until the commitment expires. A well-documented grant, with accepted reporting and commitments close to expiry, barely moves the price. A grant with no inventory and unclear clauses becomes a discount or trapped cash.

What is the next step if I have live grants and want to sell?

Prepare a schedule for each grant: granting body, amount, commitments, end date and reporting status. With that map, decide whether to adjust the timing of the sale so the most sensitive commitments expire first, or whether to consult or seek authorisation from the granting body before signing. The NRRO group covers the tax and legal analysis of these clauses. This article is for guidance only and does not replace legal advice on your specific case.

Capittal Transacciones is an M&A mid-market boutique advising deals from 3 to 250 million euros from eight offices across Spain (Barcelona, Madrid, Girona, Lleida, Tarragona, Palma de Mallorca, Zaragoza, and Valencia), part of the NRRO group. Every deal is led directly by a partner, from the first conversation to closing. If you are thinking about selling, request a free, confidential valuation.