If a business with no debt folds their name to merge with another company, by law, do other businesses that owe money to the folded name company have to pay that owed money?
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If a business with no debt folds their name to merge with another company, by law, do other businesses that owe money to the folded name company have to pay that owed money?
And is it legal for the folded name company to ask for payment to their personal name?
Asked on March 27, 2015 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
If two businesses merge, that does not eliminate the debts owed to either: anyone owing money to one or the other must pay that amount, on the same terms as they had always owed it, to the merged entity. The merged entity can have that amount be paid to any name it is legally entitled to use.
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