Closing a business requires considerable effort and attention, and the following items listed in no particular order, are considerations minimum conclusion of a franchise operation and closure of a trader.
This checklist is not "all inclusive". You should should be considered as an additional support for your lawyer and tax advisor and consult this list that is built on that if you use CONFER.
Basic preparation
1 Officers, directors and shareholders
Behold securely, both directors and shareholders and resolutions received from individual companies, registration of dealers, distributors, or a substantial part of the dealership to liquidate the assets.
Determine if the board and shareholders to authorize a termination bonus and pay for their services in your "demolition of society". Consult your accountant and lawyer to determine a reasonable amount of compensation in case of a companyCreditor challenges of the transaction.
Determine whether it is reasonable for officers to purchase their own vehicles and their spouses. Pay "Net" "Net", as that would be the sale price if the vehicle was returned to the factory or to sell, a buyer for the business.
The officers should open a new bank account with another bank, and find: (a) with a post office box or private mail service, such as an e-mail, and (b) a different color to easily determine pre- and Post-closure monitoringwritten.
Authorize the payment of wages and a corporate lawyer and accounting support. Their services are needed to properly close the deal and the company may not be able to pay later.
Authorize payment in advance, what services and supplies, the company must be maintained during the wind down. For example, property and personal insurance, property taxes (if the property is not through a third party), rent, utilities and the like.
The 2Structure and Insurance
A one-page summary of the lease must be attached to the original to make things easier. The basic fee and the rent under way, the date for any option periods, along with notations of rent increases, property investment, the owner and tenant, a notation of the initial data: The summary should include elements and if the point of the factory or place protection, such as the rent of an equivalent dollar value for each new unitsold, and a notation that LEASE is assignable and under what conditions.
Other considerations include violations of the ADA definition of leasing, hazardous materials (gas, underground tanks or underground tanks, waste disposal), on the property.
Structures
When you receive "work clothes to help," some sales and service agreements, General Motors, for "occupied" as a distinction between and "rented"Car rental services. Be sure to read your sales and service contract in order to understand and be able to exploit the differences.
Leased facilities
If the sales factor rental dealer before the sale of the dealership is in the rules of factory work, the merchant should rent for the period in which sales and service agreements established. (However, see EPA).
Check with your insurance to determine the requirements for insurancean empty building.
Other Insurance
In addition to the insurance system dealer a "tail" or require drivers on his garage keepers insurance. Most insurance companies is now "says" than "event".
In practice, most cases are settled within the limits of the insurance policy is governed and paid for both the defense and settlement.
In agreement with respect to health insurance, COBRA for all employees of the company. Here tooOfficers and directors may be able to contain the health insurance payments as part of its wind-down compensation.
3 UCC, Mechanics Lien and Title Searches
Most traders are not aware of any existing liens on the assets car dealership.
In order to accurately estimate the expected net revenues dealer, they found all the privileges of being, preferably prior to negotiations.
Possession of title reports and UCC-1 gives traders enough timeto address the problems and the answers are readily available if and when a potential buyer, the question arises.
Expected 4 because of the taxes and
Accounting standards should be the dealer or an arc of all the taxes at the time expected by traders and all taxes due. The list should include the amount due and the ground. In some countries recover unpaid taxes, a "super-lien" status and if you do not pay the dealer sales, assets andunpaid taxes because of traders selling. This accessory can occur months after the dealership was closed.
As a general rule, anyone the right fonts can be held personally liable to the account for at least half the payroll tax at source and 100% of all sales taxes are due. Moreover, in some cases, traders have been personally responsible for the money collected from customers should be treated as a "trust" funds: trade customersPayments, credit life insurance to customers and customer warranty and service contracts and awards.
5 Notes and other receivables
The "Notes and Receivables - Others" account is usually a "catch all" account to account dealership. They sell for the purposes of a trader, this account must be clean (1), the dealer has no additional funds for final sale and property taxes can explain it, and (2), to make both dealers andAuditor becomes aware of an "in-house" loan officers, directors and employees, that may be reimbursed.
6 Prepayments
The prepaid expense account is another '"catch-all account that needs to be cleaned. When planning your prepaid account expenses of the auditor must conduct a thorough search for all leases and claims custody. In many cases, equipment service, rent, lease vehicles, to bring the lease to lease computers and retail deposits,ast month's payment, or both.
7 dealership employees
Along with the normal employment relationship, there are two areas that are very important legal influence, the car dealer may: (a) the liability of pension funds, and (b) the state and federal laws on the closures.
In some countries, the retailer can be held personally responsible for the funding of pension funds, while in others, the dealer must give employees notice of possible closure. The U.S. CongressLaws passed on "closures". In cases of "closure" to both state and federal laws on the minimum number of employees, is usually 50 or 100, before the law for the mercantile society. Hart Scott Rodino Check (HSR) and the WARN Act.
As for wages, some jurisdictions have statutes which set some shareholders personally for corporate debt among workers and other employees in place. Retirement funds and pensions are considered wagesunder the statute of New York.
The auditor or auditors should have a
List of liabilities, including all amounts due to employees, compared to close to accrued vacation, believed to be the sharing of tax plans, pension and profit and wages for the time.
As for the actual layoffs will be affected if the dealer is "union", if the dealer to talk with the union to ensure that all conditions of the collective agreementmet.
8 Long-term debt
All long-term liabilities should be listed and given a method of reimbursement. Interest must be calculated. When added to interest on arrears and default on the loan balance of the loan pay-offs are typically higher than expected.
The inspector should prepare a list of these debts for the amount due, including interest, that is guilty, the purpose of debt, maturity, terms and security are guaranteed. In addition to the list is complete, theThe auditors should have a running total, daily, by the close of escrow.
9 promissory notes
As with long-term liabilities, other notes should be charged the amount including interest to date of closing, notes payable to the order, was given the duration, conditions and safety listed, and precautions are taken to eliminate the debt.
The Budget 10
The car business is one of the few retail companies that require the complete closure of all books and records,promptly at the end of each month. Factories and financial institutions require factory was built on, or approved reporting forms.
In preparation for the closure of memory, can be used for a reconciliation, said that categories such as "other income and charges", warranty, financing and insurance income not reported on the invoices, along with extraordinary items.
You will need a permanent solution for tax purposes.
11 Record Keeping
Dealers to collect athe amount of paper work, safe, affordable, conservation, presenting a problem should the sales dealer. No record sales will be as important as the day when you can not find either. Distributors related stories are first trying to retrieve documents from the mini-storage facilities, both in rain and snow.
To determine the reasonable period of time, only after the auditor dealer and lawyer account, and suggested the retailer in terms of lawProblems and other limitations provisions, the preservation of documents, it is typical for the political sphere, in the car dealership.
12 In-house service contracts
If the dealer has sold "in-house service contracts," the retailer is that customers should call the former being at home for repairs or complaints, therefore, a system-of-service along the following lines are being negotiated with merchant near the close of business.
13 HardGoods
Parts & Accessories
Each plant has its own definition of "reusable", reusable parts and accessories. Most also include a discount for shipping and handling.
Just before closing, should receive a list of all the calculation program parts and accessories, their date of purchase and payment of costs.
Parts and accessories must be classified as "reusable" and category "disposable". Reusable parts and accessories must be inventoried and packedto the factory
Disposable products must be sold to other distributors or parts of buildings as "Napa". Note: some "disposable" parts can be taken, in fact, was the supplier from whom they purchased, as Delco, Motorcraft, Mopar, Napa, etc.
Do not damage or traces of original packaging, if the inventory or pack, as some companies are not classified as elements in packages marked "reusable".
Be careful of aftermarket products such as accountGas, oil and grease, nuts, screws, accessories, work in progress and repair order (Need A / R for the collection), signs, tools, equipment and other supplies.
Furniture, lamps and appliances
The hard work fall into two categories: (a) bought back from the factory, as special tools, parts, signs, some computer systems, etc., and those who buy through the plant, such as desks, chairs, etc.
Items redeemed and not redeemed should be separated andan inventory / auction service contacted for bids for the auction, non-return items purchased. If you examine the terms of the auction, advertising such as time, location, minimum bids, the auctioneer guaranteed minimum, and so on, must be considered.
Leasehold
The value of leasehold improvements is usually lost in the notice.
Cars
While embarking on a new vehicle inventory valuation is a relatively routine, is also the time, And thus consume in order to achieve full value to a dealer, or any vehicle at the time of transfer, a checklist should be created and maintained. There are some additions and subtractions from the invoice price, which must be done.
The difference in cash to be acquired by acquiring entity of the dealer floor covering flooring vectors can be significant, particularly for internal lines, in which the holdback funds regularly average between $ 400 and $ 600 per unit, ormore.
A trader must be aware of this number, enter early so that an emergency situation during the negotiations.
Several states have laws that may be more liberal than the sale of factory and service contracts and laws specific to the termination of the dealer's responsibility to check. For example, Maine requires that the work completed overall new car dealer inventory, regardless of model year to buy back. Some states require the factory repurchase only the current model yearVehicles and other current year plus a carry-over.
In the MSO, the dealer should check all the keys of the vehicle and MSO - when the lender is not already on it.
Be prepared to liquidate vehicles and used vehicles to dealers, as parts of trucks, vans courtesy, snow plows and protesters. And 'generally easier for a good price for this can not anyone, "cherry-pick" to obtain. Wholesale different, they must offer a "group".
Make the transfer list and, if the factoryDoes not repurchase the wholesalers offer them separately and they also shop with other dealers.
Problem dealers and plates will be resolved when the license is terminated dealer.
13 Reviews and Auctions
There are a number of competent, recognized experts, our company can be recommended. The dollar value of an opinion or to maximize auction, the dealer offers from several companies should determine how they work, what documents are needed, theMethod for evaluation. After receiving this information, the trader must know the exact form and dates necessary to maximize the valuation or the sale of fixed assets. Furthermore, by assigning an employee to prepare thoroughly the activities and times, the dealer will better understand the value of goods on the premises.
Are perhaps the biggest problems in terms of expertise and auctions: (1) neither party takes the time to understand the methods and reasoningIf the appraisal / auction house, and (2) the dealer is almost never prepare adequately the activities and schedules. We always find that all the activities of dealers do not seem to have both times because it wrote off, or because of an error.
14 Contracts for services
Service contracts for maintenance and personal services should be checked for guarantees, duration and transferability. A mistake may mean that personal responsibility forThe power would remain with the retailer. Maintenance service contracts must be planned with details specifying the amount of each payment, the duration of the contract the service to be provided, and any personal responsibility. All contracts may be canceled must be calendared for the cancellation.
15 Contingent liabilities and reserves
The dealer must know the amount of all paper guarantees exceptional detail that was to unconditionally guaranteed by the dealer or dealers.The dealer needs to know what account the dealer's tax return for early withdrawal and the amount, if any, recourse against the dealer and the dealer.
A sheet of existing contracts must be drawn up, specifying, in addition, the description of collateral, the maturity and delinquency status and level of credit, such as A, B or C, or that the system of business financing. The type of employment, average monthly fee and keep the shouldersCurrent reserve balance should be included.
Shortly after notifying the seller of financial institutions plan to close the dealership, the creditor must be dealt with once again, in relation to the availability of "walk-away" programs. In addition, working with small reserve in case of retention of the dealership, the amount of the provision (s) to bring the standards should be required after completion of the retail set. Sometimes, this amount has been shownsignificant.
Finally, if the confidentiality is no longer a problem, if the dealer with the lender, how to deal with foreclosures to discuss future extensions, renewals and maintenance functions. If the previous dealer-lender relationship was good, the dealer will help you find that an incredible amount of funds available from a cooperative society.
Finally, if the dealer discovers a large contingency, a measure of support can be negotiated with the buyer.
16Loans and Cash
Cash
Although seemingly obvious, cash dealers should be considered. In general, a new current account at a financial institution should, that is not connected with the current situation of business of the distributor to be opened. Also, if possible, a locally owned bank to be used, compared to a national bank. The dealer should take into account the number of signatories on the account (s) to two, one of which occurs the day traders and the vicinity, the number ofSignatories must be reduced in principle the only dealer.
Factory Loans
Finally the moment you reach a decision in the store, the factory claims should receive focused attention. At a time when awareness of the imminent closure of the factory has reached to terminate the payments.
Try all the problems complaints, resolve disputes, as a guarantee, far from being closed. In any case, the support of the factory, will be essential to the completion of the EscrowWarranty Process reminders and other problems.
Loans to employees
Loans to employees must also be analyzed in this first phase. An immediate policy, the advance should not be introduced.
Without warning, employees should plan activities and set a course for a refund. One of the best ways to prepare a schedule of what each employee needs and with a final payment terms, make sure that claims areDeduction from wages of the final test. Unfortunately, some states do not allow the dealer to pay to offset their debts. Your government policy / law should be reviewed with your lawyer before any debt employee compensation.
The data demands of customers and vehicles
The dealer is required to ensure that the vehicle and the customer's claims, except for service and parts are pure. Necessary adjustments and cancellations must be made in order to achieve aIt supports realistic figure shows the amount of money that can be expected.
If the policy of the dealer's service and parts has been noted, must be paid to these accounts in order. In addition, the trader must decide whether employees dealer collections, and one or more to run, or if the merchant accounts for a house can be sold to factoring.
17 Leased assets
Not all rental agreements be terminated. The dealer must determine which, ifall those who have to negotiate leases and personal guarantees with respect to such contracts, a common effort to reach an agreement with the owner. This assumes that the company is insolvent. If the company is solvent, has a solution about business leases are negotiated.
18 EPA Inspection
If the property belongs to the closure by operators for operators, it is important where and what problems could be determined. If gas or oil undergroundStorage tanks should be located on the property was never dealer, the dealer, if not already available, please contact a private site, and receive a certificate of conformity or the distance against them.
Be aware that you can modify any agreement between the parties or distribute their respective obligations with respect to federal and state laws.
19 The cost of the transaction
There are some extraordinary expenditure expenditure, such as real estate valuation,Fees, attorney and accounting expenses incurred to prepare a car for the house closing. These costs are both retailers and directly from the general account of the end of the distributor's personal account to pay. The dealer must take care to review your accountant to record these costs, so the accountant can easily determine the cost of goods sold and categories of expenditure, for the purposes of income tax, both personal andBusiness.
Expiry
In the absence of exigent circumstances, if necessary retailers estimate the amount of time to prepare to close the store, usually about 30 days. If possible, the closure of a payday.
Responsibilities of the Comptroller
The dealer should be prepared for the controller, or responsibility for the preparation, the following items and documents for the transfer:
The books and records;
All orders and payments;
TheFranchise termination letter and acceptance of resignation Buyer factory or distributor;
List accounts receivables;
Prepayments;
Preparing an inventory of leased equipment;
Old machines credit card security and unity;
The return of components and accessories, the return of the vehicle, letters of request and rent assistance;
The transmission and / or deletion of different phone numbers, PO box;
Insurance schemes: The life, the keeper of the garageTail, movable and immovable property, health, etc.
The dealer responsibilities
The operator shall prepare or review and monitoring of all elements of the checklist and to prepare for the following elements:
Opt for employees who are required to remain at the closure of the shop are complete.
Check sellers decide whether to give orders to break, or a different bank.
Cancel the credit card companies, including phoneWe do not accept credit cards and cell phones - if not his own.
Reliable phone service. Insert a voice message from a dealer referral.
Determines the factory functions regarding your rights to lease or purchase. Be SURE and claims to support requests within IN SALES AND SERVICE HERE.
If necessary, talk to a broker and the list of equipment on the market (rent or purchase).
Discover where credit is moneyand move the bill when filed in the same bank, where the company lives the general ledger.
Close or transfer to another dealer service operating every Ros. If possible, negotiate a commission.
Create a press release for closing.
Cancel all new vehicle types, orders that are not covered, not all new cars.
Close all services RO so that the work was completed after the closing date. Do not accept a job that can not be completed by store securityDate.
As always, when you close a distributor, you should always consult with a qualified attorney and tax advisor.
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