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California Bulk Sales Law

The California law known as the Bulk Sales Law is the subject of this article. The relevant statutes governing the California Bulk Sale Act are found in sections 6101 through 6111 of the California Commercial Code. The California Commercial Code is the California Legislature-approved version of Article 6 of the Uniform Commercial Code.

The Bulk Sales Act applies to sales that are not made in the normal course of business and that amount to more than half of the seller’s inventory and equipment, by sellers whose primary business is the sale of inventory in stock, including those who make what they sell, and by restaurant owners.

The Bulk Sales Act requires the bulk buyer, at least 12 days prior to the sale, to file notice of such sale with the county recorder’s office in the county where the seller or assets in question are located and that publish the notice of sale at least once in a newspaper of general circulation in the judicial district where the seller or the goods are located.

With some exceptions, a buyer who fails to comply with sections 6104 and 6105 of the California Commercial Code is liable to a creditor of the seller for damages in the amount of the creditor’s claim, which is reduced by any amount that the creditor does not accept. . they have found out even if the buyer had complied with the Bulk Sales Act.

There is a very short statute of limitations in the Bulk Sales Act, so no matter what the situation is, NO cause of action can be established once two years have passed from the date of the bulk sale. Any party that even gets a hint that someone who owes them money might be thinking of selling their business needs to act and act quickly.

California Commercial Code Section 6110 sets out the details about the statute of limitations in the Bulk Sales Act.

To view the full text of the California Business Code, or any other California Code, visit this website:

A California Court of Appeals has ruled that in enacting the Bulk Sales Act, the California Legislature is seen as targeting two forms of business fraud: first, the fraud of a debtor merchant who sells his stock to a friend for less. of your value, country your creditors less than what you owe, and expect to get back into business “through the back door” later; and second, the fraud of a debtor merchant who sells his shares to anyone, including a bona fide buyer, for any price, pockets the proceeds and disappears, leaving his creditors unpaid.

And the United States District Court for the Eastern District of California held in one case that the central purpose of the bulk sales statutes is to give a merchant’s creditors the opportunity to satisfy their claims before the merchant can transfer your assets and disappear with the sale proceeds.

The author sincerely hopes that you have enjoyed this article and found it informative.


Stan burman

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