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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
Satisfied Customers: 19653
Experience:  B.A.; M.B.A.; J.D.
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Can you transfer a DBA (non legal corporation name) when you are thinking about

Customer Question

Can you transfer a DBA (non legal corporation name) when you are thinking about bankruptcy. We have a separate name that is really not on any legal docs as everything really goes under our retail DBA or corporate legal name. We may need to go bankrupt but trying not to lose the side of the business that actually does well. Everything still files back under the corporation though. I just want to try and keep the DBA either sell it to someone or transfer it.
Submitted: 6 years ago.
Category: Business Law
Expert:  Phillips Esq. replied 6 years ago.
Thank you for giving me the opportunity to assist you. I encourage you to ask me for clarification, if you are not clear with my Answer.



Question: Can you transfer a DBA (non legal corporation name) when you are thinking about bankruptcy. We have a separate name that is really not on any legal docs as everything really goes under our retail DBA or corporate legal name. We may need to go bankrupt but trying not to lose the side of the business that actually does well. Everything still files back under the corporation though. I just want to try and keep the DBA either sell it to someone or transfer it.


 


Response: No. If you transfer the property to someone or sell it and then file for bankruptcy protection, the transfer would be considered a fraudulent transfer and attempt to hinder and delay and frustrate the claims of your creditors. The bankruptcy trustee is authorized to avoid the transfer to take the property back from the person you transferred it to. Pursuant to 11 U.S.C. Section 548 subsections (a) and (e) a bankruptcy trustee can void fraudulent transfers made within 2 years prior to bankruptcy filing and in some instances within 10 years prior to bankruptcy filing if transfer was made to a trust.

In addition, the Bankruptcy Trustee may object to your bankruptcy discharge because of substantial abuse pursuant to 11 U.S.C. Section 704(b)(2) and file a motion to have your bankruptcy case to be dismissed. You may be charged with bankruptcy crime for concealing your assets. See 18 U.S.C. Sections 152 and 157. Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both.



Edited by AttorneyPhillips on 2/5/2011 at 8:47 PM EST
Customer: replied 6 years ago.
I am not sure if your definition of "property" means the DBA just the name or not but i dont think you answered my question. I am refering to only the name not any assets or liabilites. The ficticious name is what i am looking to transfer to another company or sell. All debt will still be assumed by the corporation.

Example: Corpotation name is X and has two DBA names Y and Z.
All legal documents have been signed under X and Y. Z is just our wholesale side but everything else gets filed together same bank account taxes etc. Now i want to seperate the company with name Z.

We may be potentially reaching a bankruptcy point but really trying not to. We have always wanted to seperate it but because of funding we never bothered to.

Would there be a problem to split them at this point?
Expert:  Phillips Esq. replied 6 years ago.
After you split them, what company would be seeking for bankruptcy protection?
Customer: replied 6 years ago.
X the corporation and Y (the dba if we have to, not sure how binding a DBA name is to the parent company) may go into bankruptcy.

Z will start over from scratch as another corporation with that same company name Z if possibe.

We also just registered a new name, company B but it has not publicly released. If the corporation gets dissolved will that name have to be lost as well?

My question is how binding is a DBA name to the actual company going bankrupt. I know people create many DBA for several businesses under that one corporation. There must be some way to save that company name and not have to go into bancruptcy because there is a problem with one name.
Expert:  Phillips Esq. replied 6 years ago.
Thank you for the clarification. However, I will opt out and give another Expert the opportunity to comment on your case.
Customer: replied 6 years ago.
Ok so this will automatically be forwarded to them right?