Bulk transfer laws are tailored to help avoid any merchant from carrying out fraud with his/her creditors through the sale of any business assets, or neglecting the payment of any amounts which are owed to creditors. The law also necessitates a notice, enabling creditors to take all necessary legal measures for safeguarding their interests.
Bulk transfers are laws as mentioned above. At the same time, it also means bulk sales. They have been regulated earlier by individual state regulations and policies and are known as Bulk Sales Acts. They have levied specific requirements for property transfers as well. These measures are aimed at preventing sellers from any secret sales of businesses and subsequent decamping with proceeds for bypassing repayment of debts which are outstanding. Any prospective business buyer should get a list of the seller creditors while issuing them advance notifications of sales, in order to take measures for safeguarding themselves against any defaults of sellers on his/her debts
A bulk sale/transfer takes place whenever any business sells its entire inventory or almost its entire inventory to any single purchaser/buyer, and this sale is not any component of the normal order of business.
