Bulk sales laws require that escrow be opened for which type of transaction?

• A. For all sales involving personal property.
• B. Only voluntarily.
• C. For all sales involving a liquor license.
• D. For all sales involving a business in which real estate is not a part.

Answer: (C)

Bulk sales laws regulate how the sale of a business’s assets is handled to protect creditors and ensure liabilities are addressed before the buyer takes over. When a sale involves a liquor license, escrow is opened because the license is a highly regulated, transferable asset that requires coordination with the licensing authority and careful handling of funds to satisfy debts. The escrow process provides a neutral place to deliver notices to creditors, verify license transfer compliance, and ensure the buyer assumes only the agreed liabilities. This protects both sides and helps prevent post-sale claims related to the license or the business. The requirement isn’t triggered by simply selling ordinary personal property, nor by every voluntary transfer; the involvement of a liquor license creates the regulatory complexity that makes escrow necessary.