Generally,a corporation that purchases the assets of another corporation is not responsible for the liabilities of the selling corporation.

Question

Quizplus · Accepted Answer

This is known as the "rule of successor liability" and it means that the liabilities of a selling corporation do not transfer to the purchasing corporation unless they agreed to assume those liabilities in the purchase agreement, or if the transfer of assets is deemed a fraudulent attempt to avoid the liabilities of the selling corporation.

Generally,a Corporation That Purchases the Assets of Another Corporation Is