Be prepared to sell your alarm company February 21, 2019

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Be prepared to sell your alarm company
February 21, 2019
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Be prepared to sell your alarm company
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            When it comes time to sell your alarm accounts or company you are going to have to be prepared in many ways you haven’t thought about.  Sure, you may be aware of lots of the information you will need, but likely there will be many more issues that have to be resolved before you can close your deal.  
            I think almost half the clients that call me to represent them as sellers tell me that they don’t know their RMR, their customer makeup or percentage of different systems.  They “need to ask their bookkeeper” or manager or accountant or wife.  Maybe they just don’t want to tell me on that initial phone call, but I think not.  They really don’t know.
            Knowing the RMR information is certainly a good start, but there’s so much more that will need to be done.  How much more depends on the size of the deal.  Why?  Because a deal that requires lender financing is going to involve lender attorneys, and they are going to want much more than the buyer’s lawyer wants, or needs.  
            It makes sense to keep tabs on your business and conduct your business with all the formality the law generally requires.  There are lots of reasons for that, but for our purposes, the reason is that you’re going to have to produce these documents and information at the time you close your deal, before the lender advances the funds.  You may as well stay on top of these items even if selling isn’t something you’re thinking about now.
            Here is a list of closing items that you’re going to have to produce.  Not all of it will be required by the buyer’s attorney or the Asset Purchase Agreement.  However, you’ll find that the lender won’t fund the deal without it.
  *  Corporate minutes and resolutions during operations
  *  Tax return filings
  *  Good standing
  *  Debt payoff letters
  *  Lien satisfactions
  *  RMR for all categories
  *  Contract forms
  *  Vendor agreements, including central station
  *  Executory contracts [leases, licenses, long term commitments, advertising]
  *  Bank records
  *  Subscriber information, including Account Number, Radio account Number if any, central station account number, date of the contract and expiration date of contract,  the name, address, zip code, telephone number, whether residential or commercial account,  type of alarm system, amount being charged each subscriber, method of billing (monthly, quarterly, semi-annual or annual), whether subscriber is tax exempt, last payment made by each subscriber, and amount in arrears, the period of time the subscriber has been billed through and the method of payment (i.e., billed, credit card, auto debit); difference between the written contract price (if any) for service pursuant to said contracts (if any), and the amount presently being charged has been paid.  Subscribers’ payment history and seller’s accounts receivables.
Inventory
  *  Vehicles
  *  Other equipment used by business included in the sale 
            For proper representation when selling or buying contact Jennifer Kirschenbaum,Esq at 516 747 6700 x 302
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THE ALARM EXCHANGE

This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc. Those wishing to sell or buy; borrow or lend; dealer program or dealer; central stations; insurance brokers; business  brokers, insurance companies. Equipment to sell; looking for employees; subcontractors; mergers;

Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com