If you are thinking of buying an existing business, you better be aware of the doctrine of corporate successor liability. This scary sounding doctrine essentially states that a new owner of a business can be held liable and responsible for the bills, expenses, and liabilities of the old owner if:
1. the purchaser expressly or impliedly agrees to assume the debts and liabilities
2. the transaction amounts to a merger or consolidation
3. when the purchaser is merely a continuation of the seller, or
4. when the transaction is entered into fraudulently to escape liability for the debts and other liabilities
To read more about the doctrine of corporate successor liability, check out: Forrest Edwards d/b/a Strike Team Media, Appellant, vs. Black Twig Marketing and Communications LLC d/b/a Black Twig Communications, Respondent.
Missouri Court of Appeals, Eastern District – ED99581
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