Legal Question in Business Law in California
Auction business need to be a licensed escrow?
The company is an online auction for domestic and international buyers and sellers to trade products worth thousands of dollars. Instead of paying a 3rd party escrow service, we want to provide an escrow for each auction trade.
Question 1: If the core business is an online auction, and we want to provide and charge users a fee for the escrow service, do we need to be a licensed escrow?
Question 2: If we do need to be a licensed escrow in California, can we provide escrow service for international trades?
1 Answer from Attorneys
Re: Auction business need to be a licensed escrow?
From the information you provide, yes you will need to licensed as an Escrow Agent by the Department of Corporations. Often the escrow services are set up as a a wholly-owned corporate subsidiary, for example, ACME Escrow Services, Inc. - a direct provider of escrow services for ACME Corporation. To answer your second question, yes you can provide escrow service for international trades as long as your customers agree to your stated terms and conditions, i.e., choice of law provision, etc.
If you need any additional information, please feel free to contact me.
Yours truly,
Bryan
877.201.8728
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