1. The Laws of New York
  2. Consolidated Laws
  3. General Business
  4. Article 29-F: Going Out of Business Sales


Section 587 Investigation of application; grounds for denial; revocation of license

General Business (GBS)

Investigation of application; grounds for denial; revocation of license. (a) Upon receipt of the application, the licensing authority of the appropriate city, town or village in which such sale is to be held may make or cause to be made an examination into any or all the facts contained in the application and inventory in relation to the proposed sale. A license shall be denied or refused if any one or more of the following facts or circumstances is found to exist:

  (1) That the applicant is not the true owner of the goods, wares and merchandise to be sold.

  (2) That the applicant has not been the owner of the business advertised or described in the application for a license hereunder for a period of at least six months prior to the date of the application, or, if the applicant be a corporation or association, controlling interest in the corporation or association had been transferred within six months prior to the date of the application for a license hereunder, except-

  (i) Where the application is for a license for a "sale of goods damaged by fire, smoke, or water," or a "defunct business sale," and the inventory listed in the application contains only those goods, wares or merchandise which were on the premises at the time of the occurrence of the circumstances warranting the granting of a license hereunder;

  (ii) Upon the death of a person doing business in the state, the representatives of his estate, or his or her heirs, distributees, devisees, legatees, or their successors and assignees, shall have the right to apply at anytime for a license hereunder;

  (iii) Where a business is required or compelled to be discontinued because the premises upon which it is being conducted have been taken by eminent domain or because the premises must be vacated pursuant to legal or judicial proceedings.

  (3) That in the case of a "closing out sale," the applicant, either as owner, partner, member of an association, or principal stockholder of a corporation, was granted a prior license hereunder within one year preceding the date of the filing of the application, or the applicant, within one year prior to the date of filing of the application, has conducted a sale in connection with which he advertised or represented that the entire business conducted at the particular location for which the license is sought was to be closed out or terminated.

  (4) That the inventory contains goods, wares or merchandise not purchased by the applicant for resale on bona fide orders without cancellation privileges.

  (5) That the inventory contains goods, wares or merchandise purchased by the applicant on consignment, except if the consigned goods, wares or merchandise have been damaged while in the applicant's actual possession.

  (6) That the applicant has within one year prior to the filing of the application been convicted of a violation of this act.

  (7) That the goods, wares or merchandise as described in the inventory were transferred or assigned to the applicant prior to the date of the filing of the application and that said transfer or assignment was not made for a valuable and adequate consideration.

  (8) That in the case of a "closing out sale" or a "defunct business sale," the inventory contains goods, wares or merchandise purchased by the applicant or added to his stock in contemplation of such sale and for the purpose of selling the same at such sale. Any unusual purchase or addition shall be presumptive evidence that such purchase or additions were made in contemplation of such sale and for the purpose of selling the same at such sale.

  (9) That any representation made in the application is knowingly false.

  (b) Revocation. The licensing authority shall revoke any license granted under the provisions of this article if, after investigation, it shall determine:

  (1) That any sale by the applicant has been or is being conducted in violation of any provision of this article, or;

  (2) That the applicant has made any material misstatement in his application for said license, or;

  (3) That the applicant has knowingly failed to include in the inventory, filed with this application, all goods, wares or merchandise required to be contained in such inventory, or;

  (4) That the applicant has added or permitted to be added to said sale or offered or permitted to be offered at said sale, any goods, wares or merchandise not described in the original application and inventory, or;

  (5) That the applicant made or permitted to be made any false, misleading or deceptive statements, whether written or oral, in advertising said sale, or in displaying, ticketing, or pricing goods, wares or merchandise offered for sale.

  (c) Any complaint filed with the licensing authority concerning any violation of this article shall be in writing and duly verified by the complainant.

  (d) If the licensing authority shall revoke any license pursuant to the provisions of subsection (b), it shall serve notice of such revocation upon the licensee within twenty-four hours of the revocation. Notice of revocation shall be served on the licensee in the same manner as a summons as prescribed by the civil practice law and rules or by registered or certified mail, return receipt requested. The failure of the licensee to discontinue said sale upon receipt of such notice shall constitute a violation of this article.