XII.
(5%)
Seeking to streamline its operations and to bail out its losing ventures, the stockholders of X Corporation unanimously adopted a proposal to sell substantially all of the machineries and equipment used in and about its manufacturing business and to sink the proceeds of the sale for the expansion of its cargo transport services.
(a) Would the transaction be covered by the provisions of the Bulk Sales Law?
(b) How would X Corporation effect a valid sale?
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1 comment:
XII.
a.
No. The Bulk Sales Law applies specifically to merchants who obtain their stock or merchandise on consignment and may unscrupulously decide to sell the bulk of their stock and thereafter disappearing, without remitting shares of the suppliers who are left with no remedy at all. The law does not apply to corporations since, as to them, it is the Corporation Code that applies.
b.
X Corporation can effect a valid sale in the normal way since the proceeds of the sale will be appropriated for the conduct of its remaining business.
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