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I bought a scrapbook business 5 years ago, I found out they kept their business tax # and been buying wholesale still

Lincoln, NE |

They have been ordering wholesale and selling some products to other people when they knowing sold the business to me.

They told me when I bought it that they wanted to keep their name for sentimental reasons, so I changed it to Pages in Time. It was A Page in Time. I think now I know why, so they continue to order wholesale.

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Attorney answers 3


It isn't clear whether you have a question you are asking.

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If you bought the assets of their business instead of the stock of the company then the company has the right to the tax ID since the entity has that unique number as your entity would have it's own. However, I think what you are trying to ask is if they can continue and compete against you after allegedly selling the business to you. The way this normally gets handled is in the Asset Purchase Agreement and the specific topic is called the noncompete covenant. This clause, if properly drafted, would have seller agree to not compete (and the seller's owners) against buyer for some period of years in some specified geographic area. If your purchase agreement did not address this issue then you a out of luck unless there are other provisions that you could allege were breaches of the agreement. As a last ditch effort, you could sue for fraud if they misrepresented the terms of the sale and how it was to be conveyed to youi....essentially a tort of fraud in the inducement. Best you meet with a business litigator to evaluate your ability to shut down the competing seller.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.