When purchasing a business in Pennsylvania, buyers naturally focus on the purchase price, financing, due diligence, and the assets they are acquiring. One less obvious issue can create significant liability after closing: Pennsylvania’s Bulk Sales Law and the need for tax clearance certificates. Pennsylvania law generally applies the bulk sales requirements when a business sells or transfers 51% or more of certain business assets, including inventory, fixtures, machinery, equipment, buildings, ...
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Anyone considering the purchase of an existing Pennsylvania business should be aware of Pennsylvania’s “Bulk Sales” laws. These statutes are designed to protect the Commonwealth’s ability to collect unpaid taxes from a business seller, but also provide the buyer with immunity from successor liability for the seller’s unpaid tax obligations to the state. Wise buyers will comply with the pre-close notice requirements to the Department of Revenue and the Department of Labor in order to mitigat...
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