License Requirement For Acquiring Plumbing Business In New York
November 06, 2024
by a searcher from Università Bocconi in Great Neck, NY, USA
Considering an acquisition of a Brooklyn-based plumbing business serving NYC clients—would I need a Master Plumber License to legally own and operate it, or could I structure the business to meet licensing requirements through other means, such as employing a licensed Master Plumber? Any insights on best practices or potential regulatory considerations would be greatly appreciated!
in Saskatoon, SK, Canada
To own a plumbing company in NY requires the owner to be a 51% owner of both the voting shares and equity shares. However, there is nothing saying that the company cannot be 49% owned by a holding company that you 100% own. With that structure, you can then craft a profit sharing agreement that works in your favor. Essentially making that plumber an employee in pay structure. You then need a buyout option where if the master plumber needs to be "let go" or they wish to quit, they can be bought out. You would need to cover your bases here by always having another master plumber to take their place.
To make this model stable, you would likely want to have a company that employs multiple master plumbers that are there to mitigate risk. Otherwise, you will need a really strong good faith relationship with another plumbing company that is able to take over ownership as needed until you find another master plumber.
Frankly, it's messy. But possible if its big enough. Don't take this advice to the bank. I would defer to literally any other person who is a lawyer. But if i was walking into a scenario like this, I would attempt this path first.
from INSEAD in New York, NY, USA