Bulk Sales Law - Explained
What is Bulk Sales Law?
Written by Jason Gordon
Updated at April 7th, 2023
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is a Bulk Sales Law?
A bulk sales law is a federal or state law that guides the transfer of bulk sales (all of the business assets or inventory) from a business to a buyer (generally another business) that occurs outside of the ordinary course of the business.
Back To: COMMERCIAL LAW: CONTRACTS, PAYMENTS, SECURITY INTERESTS, & BANKRUPTCY
Where do Bulk Sales Laws come from?
This law protects creditors and also prevents business owners from avoiding creditors through bulk transfers. Bulk sales must be registered with a federal or state government agency so that creditors can be notified of bulk transfers whenever they occur.
Bulk sales laws at the state level fall under the Universal Commercial Code (UCC). Bulk sales laws at the federal level are contained in the Uniform Fraudulent Transfer Act, Chapter 11 of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.
Bulk sale done outside the tenets of either federal or state bulk sales laws include the following:
- sales done with or without the intention of defrauding or evading creditors but which eventually turned out to be fraudulent.
- A bulk sale with no adequate payment or fair value of assets sold.
- A bulk sales or transfer to an entirely different business entity outside the course of the business.
- A bulk sale to just one party.
Related Topics
- Bankruptcy Law (Intro)
- What is Bankruptcy?
- Insolvency - Definition
- What are the types of business bankruptcy?
- Chapter 9 Bankruptcy
- Chapter 12 Bankruptcy
- Chapter 15 Bankruptcy
- Who are the participants in the bankruptcy process?
- Key concepts behind the bankruptcy process?
- Absolute Priority Rule
- Pari Passu
- What rules govern the bankruptcy process?
- Bankruptcy Abuse Prevention and Consumer Protection Act
- American Bankruptcy Institute Definition
- What the authority of the bankruptcy court?
- What is the authority of the trustee (debtor in possession) in bankruptcy?
- Debtor in Possession
- What assets of the debtor are included in the bankruptcy estate?
- Bulk Sales Law
- What is the automatic stay in bankruptcy?
- What is a claim by creditors of the bankruptcy estate?
- What is voluntary and involuntary bankruptcy?
- What is the Chapter 7 bankruptcy process?
- What is the Chapter 11 bankruptcy process?
- How to File Bankruptcy for a Business
- Accept or reject contracts?
- Avoiding powers?
- Stay of Proceeding?
- Use of Business Assets?
- Post-Petition Financing?
- Bankruptcy Financing - Definition
- What is the appointment of a Trustee or Examiner in business bankruptcies?
- What is a Plan of Reorganization?
- Reorganization - Definition
- Subordinated Debt
- Preferred Debt
- What is Cramdown of a reorganization plan?
- To what extent does the bankruptcy process relieve a debtor's debts?
