KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ********************** Who should be seller if alarm accounts, you or your company June 6, 2023 ******************************* Who should be seller if alarm accounts, you or your company ****************************** Ken, Thank you for all you do for the alarm industry. We use the Ken Kirschenbaum contracts and have a company that would like to buy 10 accounts. Do I sell them using "MY" name or the company name in the agreement? The contracts of course say the company name but as part owner of the company the buyer would like me to be selling them the contacts. (They also use your contracts) Name withheld (I am in the witness protection program) ****************************** Response ****************************** Being in the Witness Protection Program may actually come in handy down the line because I can’t think of a single reason the buyer wants you to be the seller or why you would agree to be the seller. To accomplish that the company would first assign the contracts to you and then you would sell and assign the contracts to the buyer. This will open you up personally for whatever claims may exist against the company relating to the 10 accounts and perhaps more than that. After all, a fraudulent transfer of company assets will open you up to the claims by creditors of the company. Sort of defeats at least one reason you decided to form a corporation in the first place. This is for sure, for me, an interesting request by the buyer. Interesting as in bazar, unusually, off- the-wall and beyond reason, at least any reason I can think of. But I will add that it’s dumb ideas and moves by clients that keep litigation attorneys in practice, so who am I to object? When you think about inserting yourself in the middle of the transaction as you describe consider whether you are licensed, if you have E&O coverage and what tax consequence you may incur, to mention exposure to claims against the company by subscribers and creditors. What a buyer could reasonable request is that you personally guarantee all of the representations and warranties that the company is going to have to make in the Agreement to sell the contracts, assuming you and the buyer aren’t going to dispense with those formalities and perhaps do this deal on a handshake. Why anyone would do business that way with a guy in the Witness Protection Program is beyond me. So if this is still unclear you may want to ask your deputy US Marshall to explain it more clearly. ************************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ************************* THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily. https://www.kirschenbaumesq.com/page/alarm-exchange ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** 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 www.KirschenbaumEsq.com
