Question

1. Normally, when buying a business, the seller:

does not sign a restrictive covenant.

notifies creditors 10 days prior to the sale of the business.

cannot assign his credit arrangements with suppliers to the buyer.

has little formal role or obligation in preparing documents and information necessary to the sale.

Answer 1

C). cannot assign his credit arrangements with suppliers to the buyer.

Step-by-step explanation:

As per the question, the 'seller is not able to allocate his credit adjustments associated with the suppliers to the potential buyer.' The seller must pay off and resolve his credit arrangements completely before selling off his property to the buyer. If he/she fails to do so, the buyer can sue him legally because the contract offers the asset or property to the buyer free of any previous credit adjustments with the seller. Thus, any such allocation would be considered illegal and cause damage to the seller and his image. Hence, option C is the correct answer.