ACT No. 3952
THE BULK SALES LAW (as amended)AN ACT TO REGULATE THE SALE, TRANSFER, MORTGAGE OR ASSIGNMENT OF GOODS, WARES, MERCHANDISE, PROVISIONS OR MATERIALS, IN BULK, AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS THEREOF
Section 1. This Act shall be known as "The Bulk Sales Law."
Sec. 2. Sale and transfer in bulk. ? Any sale, transfer, mortgage or assignment of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade and the regular prosecution of the business of the vendor, mortgagor, transferor, or assignor, or sale, transfer, mortgage or assignment of all, or substantially all, of the business or trade theretofore conducted by the vendor, mortgagor, transferor, or assignor, or of all, or substantially all, of the fixtures and equipment used in and about the business of the vendor, mortgagor, transferor, or assignor, shall be deemed to be a sale and transfer in bulk, in contemplation of this Act: Provided, however, That if such vendor, mortgagor, transferor or assignor, produces and delivers...
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BULK SALES LAW
Act No. 3952
The Bulk Sales Law
Definitions and Coverage (Section 2):
- Defines a "sale and transfer in bulk" as any sale, transfer, mortgage, or assignment of:
• A stock of goods, merchandise, provisions, or materials not in the ordinary course of business
• All or substantially all of the business, trade, fixtures, or equipment
- Excludes transactions where the vendor produces a written waiver from creditors
Sworn Statement of Creditors (Section 3):
- Before receiving payment, the vendor must provide the buyer with a sworn statement listing:
• Names and addresses of all creditors
• Amounts owed or to be owed to each creditor
- The statement must be verified under oath
Fraudulent and Void Sale (Section 4):
- Any bulk sale without providing the sworn statement and applying the proceeds to pay creditors pro rata is fraudulent and void
Inventory and Notification (Section 5):
- At least 10 days before the sale, the vendor must:
• Make a detailed inventory showing quantities and cost prices
• Notify all creditors listed in the sworn statement of the sale details
False Statements (Section 6):
- Knowingly making or delivering a false or incomplete sworn statement violates the law
Nominal Consideration Transfers (Section 7):
- It is unlawful to transfer bulk goods without consideration or for nominal consideration
Exclusions (Section 8):
- The law does not apply to executors, administrators, receivers, assignees in insolvency, or public officers acting under judicial process
Registration and Fees (Section 9):
- The sworn statement must be registered with the Bureau of Commerce
- A fee of 5 pesos is charged for registration
Administration and Enforcement (Section 10):
- The Director of the Bureau of Commerce and Industry administers and enforces the law
- The Director can prescribe rules and regulations for enforcement
Penalties (Section 11):
- Violating the law can result in:
• Imprisonment of 6 months to 5 years
• Fine not exceeding 5,000 pesos
• Both imprisonment and fine, at the court's discretion
Definitions and Coverage (Section 2):
- Defines a "sale and transfer in bulk" as any sale, transfer, mortgage, or assignment of:
• A stock of goods, merchandise, provisions, or materials not in the ordinary course of business
• All or substantially all of the business, trade, fixtures, or equipment
- Excludes transactions where the vendor produces a written waiver from creditors
Sworn Statement of Creditors (Section 3):
- Before receiving payment, the vendor must provide the buyer with a sworn statement listing:
• Names and addresses of all creditors
• Amounts owed or to be owed to each creditor
- The statement must be verified under oath
Fraudulent and Void Sale (Section 4):
- Any bulk sale without providing the sworn statement and applying the proceeds to pay creditors pro rata is fraudulent and void
Inventory and Notification (Section 5):
- At least 10 days before the sale, the vendor must:
• Make a detailed inventory showing quantities and cost prices
• Notify all creditors listed in the sworn statement of the sale details
False Statements (Section 6):
- Knowingly making or delivering a false or incomplete sworn statement violates the law
Nominal Consideration Transfers (Section 7):
- It is unlawful to transfer bulk goods without consideration or for nominal consideration
Exclusions (Section 8):
- The law does not apply to executors, administrators, receivers, assignees in insolvency, or public officers acting under judicial process
Registration and Fees (Section 9):
- The sworn statement must be registered with the Bureau of Commerce
- A fee of 5 pesos is charged for registration
Administration and Enforcement (Section 10):
- The Director of the Bureau of Commerce and Industry administers and enforces the law
- The Director can prescribe rules and regulations for enforcement
Penalties (Section 11):
- Violating the law can result in:
• Imprisonment of 6 months to 5 years
• Fine not exceeding 5,000 pesos
• Both imprisonment and fine, at the court's discretion