A bulk sales contract is made when sales inventory is bought. The inventory is held-up inventory and It is not manufactured goods of a company. It is a legal transfer of major assets or inventory of one business to other business.
It is a set of terms and condition regarding the transfer of the big segment of the seller materials,
This contract is applicable in the following scenario:
1. A organization is undergoing liquidation
2. A company is assigning certain aspect of the business to a new buyer
3. Bulk sales are also called bulk transfers because the inventory is transferred from one business entity to another.
4. Some state laws prohibit bulk sales in certain specific scenarios
5. A business undergoing a bankruptcy is trying to sell or transfer assets and inventory at a lower cost than their actual worth
6. Attempt to bulk sales or transfers attracts sales tax which the buyer has to bear.
6. Bulk sales contracts are governed by certain state laws
Why Use Bulk Sale Contract?
Bulk sales are not a regular sale of bulk material manufactured by the company and need specific documentation.
Source: https://www.smartbusinessbox.com/bulk-sale-contract/
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