Going Out of Business Sale
The unfortunate truth of today's economy is that many businesses, both large and small, have been or are being are forced to close their doors. Some companies operating in multiple locations may be able to remain in businesses while closing one or two locations. While it is difficult for any person or company to make the difficult decision of shutting their doors, we ask that you be mindful of the laws governing “going out of business” (GOB) sales in order to protect yourself and your company from liability.
The requirements of GOB sales are found in Massachusetts General Laws Chapter 93 Sections 28A-F. The statute requires businesses to file an inventory, limits the number of days a GOB sale may be offered, and requires a payable bond to the city or town that the sale where the sale is to take place. A summary of these requirements are listed below, however, we ask that you CLICK HERE to view the statute in its entirety.
Retailers must complete a detailed inventory, signed by the owner under the penalties of perjury, which shall include:
(i) A list of all items to be included in such sale which shall consist of only the goods, wares and merchandise actually in the place of business wherein or whereat such sale is to be conducted, at the opening of such sale, describing same by name or kind and the quantity of each thereof, and (ii) Whether or not previously listed, a listing separately in the same manner of any goods, wares and merchandise to be included in such sale which had been purchased during a sixty day period immediately prior to the filing of the inventory.
Retailers must submit the detailed inventory along with a fee of one dollar per page to the town clerk in the city or town that the sale is to take place and a copy of that inventory must be sent to the Attorney General's office. GOB sales should only include goods sold in the usual course of business. Any unusual additions to the stock made within sixty days prior to the filing of the inventory shall be evidence that such addition was made in contemplation of a GOB sale.
Length of Sale
GOB sales cannot last more than 60 days. The law does not give the city/town clerk or the Attorney General the right to grant any extensions therefore no exceptions can be made. The final date of the sale must be included in all advertisements of the sale.
Retailers must provide a good and sufficient bond, payable to the city or town, in the sum of $1,000. Every bond given in connection with any GOB sale shall be kept by the clerk of the city or town until the expiration of three years from the final date of the GOB sale, and shall be surrendered to the owner upon request; provided, however, that if at the expiration of three years the clerk has reason to believe a pending action relates to such bond, he shall retain such bond until final disposition of such action.
Again, please visit CLICK HERE for the statute in its entirety. If you have any questions, please feel free to call Erin Trabucco, RAM General Counsel, at 617-523-1900 ext.13.