Business activities which have continued with human resources and physical facilities within legal place within project district are subject to compensation.
Therefore general information on the business should be investigated to write business state report. Land Compensation Act stipulates that the basis for compensation is the date of project approval announcement. Therefore, objective data on the termination of the compensation scope should be obtained on site.
In-depth investigation is required as those who had performed business activities
before base date and got compensation for relocation cost are classified into those who will be taken care under living support plan.
Compensation for business activities is not to compensate the value of property right but to compensate income or profit for a certain period assuming that income or profit will continue in the future from the business activities and to compensate collateral loss from closing or suspending business activities.
Therefore, it should be considered as the concept different from good will under accounting.
A. Following information should be investigated related to business activities.
① Basic information to be investigated.
The basic information to be investigated related to business activities is as follows.
1. Industry, location and scale of business, and hinterland.
2. Business requirements, permission and license under applicable laws.
3. Business opening date and business details
4. Information on operating profit(evidence related to profit and loss of the business including income statement)
5. Operating assets including fixed assets and inventory.
6. Those who run the business(name written in license or permission and actual person who runs the business)
7. Information on employees and salary
8. Information required for compensation for business activities including closing and scaling down of the business, suspension period, relocation of business facilities and installation of temporary operation office.
9. In case of free-lance business which does not require permission and reporting
can be compensated if the business before base date regardless of the business registration. Therefore the information on opening of business, continuity, type should be confirmed with objective data.
Even after the date of project approval, compensation can be paid if the one succeeds the business from the third party legally. Therefore the legality of the succession should be investigated. If the owner of residual building outside of the project district claimed compensation and project operator agrees and acquires the building, those who performed business activities in residual building should be compensated thereby requiring survey on business. Free-lance business which does not require permission, license or reporting or a certain qualification under applicable laws is subject to compensation without the need to consider legality of the business. Therefore, objective data including type and performance of business, business opening timing should be collected and investigated.
② The following information should be collected and presented upon asking valuation.
In case of survey on business activities, following information should be collected presented upon asking valuation.
1. Corporation register and articles of corporation
2. Permission and license document including business permission and reporting certificate
3. Evidence document related to operating profit and business performance for the latest 3 years(including balance sheet).
4. Corporate tax or global income tax reporting statement 5. Statement or register of fixed assets and inventory 6. Salary register, receipt of income tax withholding, etc.
③ Business activities which will not be compensated
Not-for-profit corporation is excluded from the scope of compensation.
Not-for-profit corporation or group including kindergarten, National Agricultural Cooperative Federation, Korean Federation of Community Credit Cooperatives, religious facilities are excluded from compensation scope. However, cautious approach is required as child-care facility and business activities that obtained permission separated from not-for-profit corporation are subject to compensation.
Fact should be investigated clearly as below business activities are not compensated.
1. Activities without permission(no license or no reporting)
2. If the business activities are not conducted as permitted(location, business location and business activities)
3. If business activities are conducted in unauthorized building after Jan. 24, 1989(except for the lessee who performs business 1 year before the date of project approval announcement with business registration).
4. Business activities started after the date of project approval announcement(date that comes earlier between project approval announcement date and date of compensation plan disclosure).
5. If conditional permission period of plan registration has not been extended.
6. Business activities with permission and license on condition of no compensation.
7. If the business is idle or generates no operating profits regardless of business activities.
8. If the main purpose of the business is to search for purchaser and delivery of the product without production or direct consumption in a certain place.
④ Survey Method
To conduct survey on business rights with large scale more efficiently, form can be distributed to business owner to make the owner fill out general information on the business and then project operator can confirm the information. If the owner wants to continue its business activities by installing temporary business office without the closing of business, the plan to install temporary business office (location, realestate lease relationship, whether the temporary business office is newly constructed or not, cost required, etc.) or other evidence should be collected from the owner.
After the review on the eligibility of compensation for business activities, the business activities should be divided into one subject to compensation for business activities and one subject to compensation for simple relocation cost. The eligible business for compensation should be divided into suspension and closing. If the business is in the category of compensation for closing, the information on the possibility of relocation should be checked with the local government and preparation should be done to ask valuation.
B. Survey on business to be closed
① Requirements
The requirements for business to be closed are as follows.
1. In case where the business activities cannot be performed in other places in the same or neighboring city, province or county due to the characteristics of the business location or hinterland(the place where the customer of the business is located).
2. In case where the same business activities cannot be permitted in other places in the same or neighboring city, province or county.
3. In case where the relocation of the business is deemed to be very difficult to other places in the same or neighboring city, province or county by the head of city, province and county(head of the country in autonomous region) based on objective data as the business can give the feeling of aversion due to bed smell like slaughterhouse.
② Inquiry of eligibility for compensation related to business closing The business subject to compensation for business closing can be determined in case where the relocation of the same business to other places in the same or neighboring city, province and county and getting permission is very difficult, the confirmation of the head of city, province and county(head of the country in autonomous region) is mandatory. Therefore if the landowner insists closing of the business, one should confirm the information directly with the head of city, province and county.