Post-ABC: What the Business Owner Can and Cannot Do After the Assignment

Once the Assignment Deed is recorded and the assignee takes over, the business owner’s role in the former business is essentially over. Understanding what they can and cannot do prevents missteps that could create liability.

What Changes for the Owner

After the assignment: the owner no longer controls business assets, cannot make payments from business accounts, cannot enter new contracts on behalf of the business, and cannot direct the assignee’s decisions. The owner can — and should — cooperate with the assignee, provide information, sign documents the assignee requests, and remain available for questions.

Interfering with the assignee’s administration is a serious mistake. A business owner who contacts creditors to influence their claims, moves assets after the assignment, or otherwise interferes with the process exposes themselves to personal liability. The assignee has fiduciary duties to creditors — interference with those duties is not just a civil issue.

The California ABC System gives business owners and creditors the exact tools, templates, and step-by-step guidance to navigate an Assignment for Benefit of Creditors — faster and cheaper than bankruptcy. Request your free evaluation here.