What Is a Massachusetts Going Out of Business Sale Bond?

A Massachusetts Going Out of Business Sale Bond is a surety bond required by state or local authorities for businesses holding final liquidation sales. This bond provides financial protection by ensuring that:

• Merchandise advertised as "going out of business" is accurately represented

• Prices are not deceptively inflated before being discounted

• Consumers receive the goods or services they purchase

• Any outstanding debts or liabilities are settled before closing

If a retailer engages in misleading sales practices, this bond ensures that affected consumers, creditors, or regulatory agencies can seek financial compensation.

Who Needs This Bond?

You may need a Massachusetts Going Out of Business Sale Bond if you are:

• A retail store, business, or franchise closing permanently

• Conducting a liquidation, clearance, or final sale event

• Selling remaining inventory under a “going out of business” promotion

• Required by your local municipality or state agency to obtain a permit for liquidation sales

Many cities and towns require this bond before issuing a "Going Out of Business Sale Permit", ensuring that businesses comply with advertising and sales regulations.

How Does This Bond Work?

A Massachusetts Going Out of Business Sale Bond involves three key parties:

• Principal – The business owner or company conducting the sale

• Obligee – The Massachusetts state or local government agency requiring the bond

• Surety – The bonding company that issues the bond and provides financial backing

How Claims Work:

If a business misrepresents inventory, engages in deceptive pricing, or fails to fulfill sales obligations, a claim can be filed against the bond.

• The surety investigates the claim

• If valid, the surety compensates affected consumers or the government up to the bond amount

• The business owner must then repay the surety for any claims paid

This bond ensures transparency in liquidation sales, protecting consumers and maintaining public trust.

Why Is This Bond Required?

From my experience, this bond is essential for ensuring honest sales practices when businesses close. Key benefits include:

• Preventing Fraud – Protects consumers from misleading “final sale” promotions

• Regulatory Compliance – Ensures businesses follow state and local liquidation laws

• Financial Protection – Covers potential claims from consumers or creditors

• Building Consumer Trust – Demonstrates that the business is committed to fair practices, even when closing

Without this bond, businesses may not receive approval for a liquidation permit, delaying the final sale process.

How to Obtain a Massachusetts Going Out of Business Sale Bond

Securing this bond is a quick and straightforward process:

• Confirm Bond Requirement – Check with your local municipality or state agency to determine the required bond amount

• Apply for the Bond – Complete an application with a surety bond provider

• Underwriting Review – The surety evaluates your financial history, business background, and creditworthiness

• Pay the Premium – Once approved, you’ll pay a small percentage of the bond amount (typically 1-5% of the total bond value)

• Receive & Submit Your Bond – Your bond is issued and filed with the appropriate licensing authority