Brite Cosmetics Corporation purchases all of the assets of Color-All Lipsticks Corporation. With respect to Brite's liabilities, Color-All is
A) automatically responsible.
B) not responsible under any circumstances.
C) responsible if Color-All is Brite's competitor.
D) responsible if the sale is actually a merger or consolidation.

Question

Brite Cosmetics Corporation purchases all of the assets of Color-All Lipsticks Corporation. With respect to Brite's liabilities, Color-All is​
A) ​automatically responsible.
B) ​not responsible under any circumstances.
C) ​responsible if Color-All is Brite's competitor.
D) ​responsible if the sale is actually a merger or consolidation.

Quizplus · Accepted Answer

Color-All would be responsible for Brite's liabilities if the transaction is structured as a merger or consolidation, as this would typically involve the assumption of liabilities.

Brite Cosmetics Corporation Purchases All of the Assets of Color-All