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A bulk transfer usually has to do with an agreement or series of agreements that provide for the orderly transfer of the various assets of one company from one owner to another. The bulk transfer is usually addressed in a series of steps or procedures that address the transfer of each asset of the company, continuing until all the assets are successfully conveyed.
Bulk transfers usually begin with physical assets, such as buildings, land, and any inventory that is in the control of the company. The transfer of buildings and land is often a straightforward process, while the selling of inventory will often include conducting a count of all items listed in both supply inventories, goods in process, raw materials, and finished goods. Inventories also often include listings of furnishings and equipment that are being included in the overall terms of the sale.
The selling of assets continues on through other assets in the possession of the company. This would include the transfer of any banking accounts, and other financial holdings that are considered to be part of the bulk transfer. Generally, both the incumbent and new owners are able to accomplish this portion of the bulk transfer with one simple visit to the bank where the accounts reside.
Handling the bulk transfer in a series of stages ensures that the transference of assets occurs in an orderly fashion, and that each subset of the total assets are accounted for and properly conveyed in a manner that is easy to track and verify. Using a series of contracts as part of the overall bulk transfer forms the basis for verifying both the value and the composition of each transferable asset, and also affords the new owner with a fully up to date inventory of assets to launch the new era for the company.
Structuring a bulk transfer normally requires the input of current corporate officers, as well as legal counsel for both the current owners and the entity that is acquiring the assets. A bulk transfer is a common practice in the event of an acquisition, whether the buyout is part of a hostile takeover strategy or a voluntary sale of the company and its assets.
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