California real estate disclosure laws California Real Estate Disclosures | Page 72

PART II
TRANSFER OF A BUSINESS OPPORTUNITY
Unless an exemption applies, a real estate license is required to engage in
the listing, sale, transfer or lease of business opportunities on behalf of
another or others for compensation or expectation of compensation
regardless of form or time of payment.
The listing, sale, and lease of business opportunities is a very complex and
highly specialized field. This part of the booklet provides only a brief
overview of some general requirements and disclosures required of the
seller and the seller’s broker(s)/agent(s) in the transfer of a business
opportunity. A buyer’s broker(s)/agent(s) may also be required to make
certain disclosures.
NOTE: Securities dealers (brokers-dealers) may engage in certain mergers
and acquisitions of business opportunities without possessing a real estate
broker’s license.

A. Definition of Business Opportunity
The term “business opportunity” is defined in the Real Estate Law as the
sale or lease of the business and goodwill of an existing business enterprise
or opportunity. The sale or lease of a business usually involves the transfer
of business personal property, although sometimes real property is involved.
The sale or lease of a business opportunity usually includes the sale or
transfer of the stock-in-trade, fixtures, and goodwill. Typical business
opportunities include grocery stores, drug stores, gasoline service stations,
beverage shops, bars, bakeries, among others.
(CAL. BUS. & PROF. § 10030)

B. Bulk Transfer Law
The bulk transfer law is designed to prevent a merchant from defrauding his
or her creditors by selling the assets of a business and neglecting to pay any
amounts owed the creditors. The law requires notice so that creditors may
take whatever legal steps are necessary to protect their interests. For a
description of the required notices to creditors and the manner of giving
them, consult Sections 6104 – 6107 of the Uniform Commercial Code.
Businesses subject to this law include those whose principal activity is the
sale of merchandise, as well as those that manufacture what they sell. Also
included are the businesses described above, among others.
Unless otherwise limited by law, bulk transfers of goods within California
are subject to this law.
(U.C.C. § 6101 et. seq.)

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