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Can you dump constantly late paying customer or force payment by credit card / sign up for todays webinar
November 9, 2021
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Can you dump constantly late paying customer or force payment by credit card
          I have a client that renewed his monitoring in 2020. I’ve had this customer for four years and he is consistently late with paying the monitoring every three months. He refuses to put the monitoring on a credit card and I’ve been flexible with him. But every time I call for a check he yells at me like a child. I told him that I wanted a credit card to make it easier for him and he refuses. He’s now 30 days past due and I’m tempted just to tell him to take a hike and find somebody else.
          Will I be a breach? What recourse do I have to force him to put his monitoring payment on credit card?
 Thank you,
          I will assume you use a Kirschenbaum Contract™, because if I don’t then I have no idea what your deal is with the customer.  But with a Standard All in One I know exactly what your rights are.  In this case you have the right to terminate a subscriber who does not pay on time.  There are probably other reasons you can terminate under the terms of the contract, but you asked about non-payment. 
          The latest updated contracts now provide for notice to the subscriber if you terminate service; not in advance but when you terminate or suspend service.  Most of you give some notice anyway so we added it to the contract forms
          You do sound frustrated, but maybe you need to chill; at least you’re getting paid.  Even a customer who pays late, especially if the customer is consistent in payment, is better than a customer who doesn’t pay at all.  Years ago this kind of customer probably needed a personal cash pick-up every month.  Remember those customers?  Remember cash? 
          So, if you don’t want to deal with the late payments you can default the customer and terminate service.  Then you can decide whether you want to send the contract to K&K for collection.  If you do it fast enough we may have time to negotiate a reinstatement after the customer pays your legal fees and costs, a costly lesson for the customer and one that may cure the late payment syndrome. 
          Forcing the customer to use credit card where you have authority to charge each month automatically will need authorization.  When you got your K&K contract it came with the authorization you need, but in this case you didn’t get the contract signed with that provision.  You will need an amendment to the contract, a new contract or a credit card or ACH authorization if you want to automatically charge.  Update your contracts and fill them out properly, including the authorization provision. 

Today's Webinar: 
Title:  Borrowing and finance option:  DealerAlly Program
When: November 9, 2021  12 pm ET
Presented by:  Tim Meekin,   President of DealerAlly, LLC
Hosted by:  Ken Kirschenbaum,Esq
Who should attend:  alarm owners, CEOs, CFOs, Sales Managers
Register here:
Comment on what you need for shareholders agreement from article on October 28, 2021
          Start with number 18. If you cannot agree on a procedure, then don't waste time on the first ten. They are moot. Dissolving is much more difficult and trying and expensive than forming.
          For those who missed the article [and too lazy to go to the K&K website to read articles there, the checklist with 18 items is below.
          I don’t agree that number 18, dissolution, is the most important.  In fact, all of the items are important and shareholders, partners and limited partners should address each of the items in the agreement.  And, before I continue, I want to stress that having an agreement is essential for the well-being of the business and your piece of mind.  The agreement will help organize your business and the relationship with your fellow shareholders [I include partners here as well if the business is a partnership – which it shouldn’t be, and members if the business is a LLC].  There is less chance of dispute and litigation when there is an agreement dealing with the issues in dispute and the outcome is all but certain. 
          The best time to make an agreement is right now when you are good terms with your fellow shareholder(s).  Are we talking about a relative, a parent or sibling?  All the more reason for an agreement.  A best friend?  Even more reason for an agreement.
          It’s easy to reach an agreement when everyone is friendly and on the same page, hoping for success.  It’s when the unexpected happens, or sometimes just passage of time, that changes things, and things include people. 
          So yes, thinking about dissolution is important, but not most important, in fact I’d rather say, less important.  Nevertheless, it’s certainly one possible outcome and should be addressed.
1  Name and address of the corporation and state of incorporation
2  Names and addresses of the stockholders
3  Percentage of shares each will own
4.  If any shareholder has contributed any capital or paid for their shares [that would include any accounts you transferred into the corp]
5  who owns the stock now and how many shares
6  type of alarm business or other business conducted
7  number of accounts - you can get valuation at
8  titles each will have - president etc
9  whether full time work is required, or not
10  respective compensation package
11  what happens if shareholder gets disabled
12  what happens if shareholder dies
13  what happens if shareholder wants to stop working - does he have to sell too
14  what happens if shareholder wants to sell during his lifetime
15  what is buy out formula in event of disability, death, wanting to sell during lifetime
16  what is payout schedule
17  can shareholder be required to give up employment with corp and be required to sell shares, and at what price and payout
18  what is dissolution procedure and who is in charge

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301