A bulk transfer prevents creditors of the seller of a business from laying claim to the assets the buyer purchases to satisfy the seller's debts.

Question

Quizplus · Accepted Answer

A bulk transfer (also known as a bulk sale) is a transfer of a significant portion or all of a business's assets outside of the usual course of business. By law, a bulk transfer must be reported to creditors in order to prevent any potential fraud or mismanagement of the seller's debts. The bulk transfer law aims to protect the buyer from any creditor claims against the seller's debts by requiring the seller to notify creditors of the impending transfer. Therefore, the answer is true: a bulk transfer prevents creditors of the seller from laying claim to the assets the buyer purchases.

A Bulk Transfer Prevents Creditors of the Seller of a Business