Legal Question in Business Law in California
When a company is purchased by a new owner, is the new owner responsible for outstanding debts the company has accumulated? If so what is the best way to collect the debts if no response had been made by the new ownership to resolve the debt?
2 Answers from Attorneys
There is no automatic rule on who owes the money after a business is sold. It depends on the terms of the transaction between the old and new owners, and the business entity form of the debtor company.
s a Franchise Attorney I agree with the other attorney. How was the transaction structured: purchase of stock, contract of sale for assets or ? Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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