Overview of Bulk Sales Act Affidavit

 

What is this document?

A Bulk Sales Affidavit is a document required by the Bulk Sales Act (Ontario). The purpose of the Bulk Sales Act is to protect creditors of a vendor against the sale of assets without the seller first satisfying outstanding debts to its creditors.

 

When would I use this document?

This affidavit would be used in Ontario if a vendor is selling stock in bulk, which occurs outside of the usual course of business. The Bulk Sales Act (Ontario) is broad and stock is defined to include goods, fixtures, and wares.

 

Who signs this Agreement?

This Agreement is signed by the Seller/Vendor and is also signed and notarized by a commissioner for taking affidavits.

 

More details about this document?

In order to comply with the Bulk Sales Act (Ontario) the Seller/Vendor must disclose a list of all secured and unsecured trade creditors by an affidavit. The list should include their names, addresses, nature of security, amount of indebtedness, and amount due on the date fixed for the completion of the sale. The Bulk Sales Act (Ontario) requires duplicate originals of the affidavit.

The buyer should then ensure that the listed secured and unsecured creditors by the vendor/seller are paid.

Within 5 days of the transaction closing, the buyer swears an affidavit attesting compliance with the Bulk Sales Act (Ontario).

If the parties do not comply with the Bulk Sales Act (Ontario) the transaction could be deemed voidable and could allow the creditors of the vendor to apply to court to have the transaction set aside and could make the buyer liable to the seller’s creditors for outstanding debt.

 

What are the core elements of this document?

The core elements of a Bulk Sales Act Affidavit include: Parties, Secured and Unsecured Creditors, and Execution.

 

Related Documents

Asset Purchase Agreement – an agreement for the sale of the assets of a business

 

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