Frequently Asked Questions

What is the role of the County Recorder in the compliance with the bulk transfer law?

The County Recorder plays a crucial role in the compliance with the bulk transfer law, a law designed to protect business creditors. The bulk transfer law stipulates that if a buyer of a business notifies the creditors of the seller in advance of the purchase, the buyer will not be liable for the seller's debts and obligations. However, if the buyer fails to comply with the bulk transfer law, they become responsible for the seller's debts post-purchase. The County Recorder's role comes into play in the compliance process. After determining whether the transaction is subject to the bulk transfer law, the seller and buyer must prepare a list of creditors and a schedule of the property to be transferred. The buyer is then required to notify the seller's creditors at least ten days prior to the transfer, ensuring the notice meets statutory requirements. The crucial part of the County Recorder's role is that the buyer must file the list of creditors and the schedule of property transferred with the County Recorder. This step is essential in the compliance process, as it provides a formal record of the transaction and the parties involved.