He was oblivious to the life or his father's association. He thought he was selling a business legitimately. He honestly didn't know to consult Tony or reach out to an associate.

The mother pleads with Tony not to hurt him and basically admits that he was a sheltered kid and moved from Jersey and had no idea what he was doing or the repercussions of his actions.

That being said it was able to happen because he saw himself and his father's company as a normal business he was poached into selling to a Lupertazzi competitor which was basically an identical company to Barone Sanitation. Once it was done legally, on paper what could Tony really do? It was a leverage/power move by New York. In all reality in a reverse scenario Tony would have done the same to a New York Lupertazzi ran sanitation company if not for money, for leverage in negotiations with New York.