State law that applies when a a business is selling all or most of its assets outside of the ordinary course of business which imposes certain requirements on the seller in order to protect the business' creditors. Bulk sales laws have largely been superseded in most states by Article 6 of the Uniform Commercial Code (UCC).
Definition from Nolo’s Plain-English Law Dictionary
A law that regulates the transfer of business assets so that business owners cannot dispose of assets in order to avoid creditors. If a business owner wants to conduct a bulk sale of business assets -- that is, get rid of all or most of its inventory, merchandise, or equipment -- the business owner must give written notice to creditors and, in some states, publish and record a notice of the sale. Only a few states still have a bulk sales law, and in most it applies only to companies that manufacture or sell inventory from stock. The Uniform Commercial Code and most states have repealed their bulk sales law since remedies are provided by the Fraudulent Transfer Act.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:12 pm