If I bought a clothing store and have a note with the seller to pay $162 a week until paid off, is the business technically theirs if it is not paid off, even though everything is in my name?
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If I bought a clothing store and have a note with the seller to pay $162 a week until paid off, is the business technically theirs if it is not paid off, even though everything is in my name?
I signed a contract with seller, changed everything into my name and even changed the name of the business.
Asked on May 4, 2015 under Business Law, Utah
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It depends on the terms of the agreement for the sale of the business. If the agreement was that title/ownership only changed when the last paymentis made, then you would not own it until/unless you pay off the loan. Or if the note is secured by a security interest in the business, they can take it back (like foreclosing or repossessing) if you default. But if the agreement was simply that in exchange for the note, you get the business, then it should be yours--but they can sue you for an unpaid amounts.
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