A bulk sale is a sale of goods by a business which engages in selling items out of inventory, often in liquidating or selling a business, and is governed by Article 6 of the Uniform Commercial Code (UCC) which deals with bulk sales. Article 6 has been adopted at least in part in all states. If the parties do not comply with the notification process for a bulk sale, creditors of the seller may obtain a declaration that the sale was invalid against the creditors and the creditors may take possession of the goods or obtain judgment for any proceeds the buyer received from a subsequent sale.
UCC Section 6-104 specifies the duties of the bulk sales buyer, including determining the identity of the seller, and preparation of a list of claimants and a schedule of distribution. These duties are imposed on the buyer in order to give claimants the opportunity to learn of the bulk sale before the seller has been paid and disappeared with the money.
Puerto Rico Provision in Bulk Sales Agreement Regarding Information to be Supplied by Seller The Puerto Rico Provision in a Bulk Sales Agreement outlines the specific information that the seller is required to provide when undertaking a bulk sales transaction in Puerto Rico. This provision ensures transparency and protects the interests of the buyer, allowing them to make an informed decision before finalizing the agreement. The Puerto Rico Provision may vary depending on the nature of the transaction. Here are some types of Puerto Rico provisions commonly found in bulk sales agreements: 1. Identification of Seller: This provision requires the seller to provide their complete legal name, address, and other identification details. 2. Description of Business: Sellers are obligated to provide a comprehensive description of the business being sold, including its current operations, assets, liabilities, and any ongoing contracts or agreements. 3. Financial Statements: This provision necessitates the submission of the seller's financial statements, including balance sheets, income statements, and cash flow statements. These documents provide a clear overview of the seller's financial health. 4. List of Assets: Sellers must furnish a detailed list of all assets being transferred in the bulk sale, such as inventory, equipment, real estate, intellectual property rights, and any other relevant assets. 5. Liabilities and Debts: This provision mandates the disclosure of all outstanding liabilities and debts associated with the business. It includes information on loans, mortgages, liens, tax obligations, and pending lawsuits or claims. 6. Customer and Supplier Contracts: If there are existing contracts with customers or suppliers that will be transferred to the buyer, the seller must disclose these agreements, including their terms, conditions, and any issues or disputes related to them. 7. Employee Information: This provision requires the seller to provide information on the total number of employees, their positions, and compensations. It also includes details about any labor disputes, collective bargaining agreements, or pending legal actions involving employees. 8. Permits, Licenses, and Approvals: Sellers need to disclose all necessary licenses, permits, certifications, or approvals required to operate the business or maintain compliance with local regulations. 9. Taxes: This provision pertains to the disclosure of any outstanding tax liabilities, audits, or pending disputes with tax authorities. It ensures the buyer is aware of any potential tax obligations that may arise after the acquisition. 10. Indemnification: Sellers should agree to indemnify the buyer against any undisclosed liabilities, misrepresentations, or hidden issues that may arise after the sale. This provision helps protect the buyer from unexpected financial burdens. In conclusion, the Puerto Rico Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller comprises various clauses that ensure the buyer receives comprehensive and accurate information about the business being sold. By including these provisions, the agreement aims to safeguard the buyer's interests and facilitate a transparent transaction.
