If we bought out another company, can we automatically open a charge account for their customers?

Are they bound to our terms, finance charges, etc. and can we take them to court for non-payment if we don’t have a signature on file?

Asked on September 13, 2013 under Business Law, Vermont

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

If you bought the actual business structure--the corporation or LLC (if it was a corporation or LLC)--then you own the existing customer agreements and accounts and can use those. Since you own the existing business--it is still in place and still running, and only its shareholders or members have changed--all of its agreements, accounts, etc. are still in place. (Note that you cannot change terms without customer agreement, but are still bound to the terms that had existed.)

If you did not buy the company structure, but only bought the assets of the business, then no, you cannot open accounts for the customers or hold them to any agreements without their consent.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

If you bought the actual business structure--the corporation or LLC (if it was a corporation or LLC)--then you own the existing customer agreements and accounts and can use those. Since you own the existing business--it is still in place and still running, and only its shareholders or members have changed--all of its agreements, accounts, etc. are still in place. (Note that you cannot change terms without customer agreement, but are still bound to the terms that had existed.)

If you did not buy the company structure, but only bought the assets of the business, then no, you cannot open accounts for the customers or hold them to any agreements without their consent.


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