California real estate disclosure laws California Real Estate Disclosures | Page 73

C. Sales Tax Clearance
Under the sales and use tax law, the State Board of Equalization must be
notified before the sale of all or part of a business or the stock of goods of an
enterprise engaged in selling tangible business personal property. The
purpose of the notification is to obtain a certificate of tax clearance and a
seller’s permit.
Any unpaid sales tax could become the liability of the buyer, whose identity
must be made known to the State Board of Equalization. An escrow holder
will generally not close a bulk sale escrow without notice to, and clearance
from, the State Board of Equalization.
(CAL. REV. & TAX. § 6811)

D. Transfer of Liquor License
Before completing the transfer of a business involved in the sale of alcoholic
beverages, the Department of Alcoholic Beverage Control (ABC) must be
contacted. ABC will require that certain notices be given and that the
applicant (the buyer) submit certain information before the liquor license
will be transferred.
(CAL. BUS. & PROF. § 24073)

E. Franchise Investment Law
The Franchise Investment Law requires that a prospective buyer receive
detailed information about a franchise opportunity. Unless specifically
exempt, every franchisor who offers a franchise for sale in California must
register the sale with the Department of Corporations, and a permit from the
Department of Corporations may be required in advance of such offering.
A person authorized to sell certain defined non-exempt franchises is a person
who is:
•

Identified in an application registered with the Corporations
Commissioner for an offering of a franchise in California;

•

Licensed as a real estate broker; or

•

Licensed by the Corporations Commissioner as a broker-dealer or agent
thereof under the Corporate Securities Law of l968.

(CAL. CORP. § 31210)

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