If I buy a business from someone am I subject to existing creditors' claims?
Question Details:I am in the process of buying a business from a person who owes a lot of money to people that he borrowed it from. My question is, can these people get a lien against the business after I buy it from him?
If you buy the business structure--the LLC or corporation--and if it was the business that owed the money, then yes; creditors of the current business will remain your creditors, since the business is continuing.
If you buy the business's assets (e.g. customer list, goodwill, inventory, intellectual property) but not the business structure, then no--it would be the LLC or inc., which you're not acquiring, which stills owes the money.
However, be careful that none of the assets you buy were used to secure any debts; if so, then creditors can still reach those assets, no matter who owns or buys them.
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