Transferring contractor license to new entity for asset deal?
February 03, 2021
by a searcher from Stanford University in San Diego, CA, USA
Has anyone navigated an asset purchase on a services business that required timing the transfer of the license with the day of closing? Hoping to avoid a stock purchase. I am working with a consultant on the license front but wanted to ping the wisdom of the crowd to see if anyone found any streamlined ways of doing this in order to alleviate potential concerns of the seller. Feel free to message me, thanks!
from University of Pennsylvania in Miami, FL, USA
I went through this process last fall and i learned enough to be dangerous relating to California. (as an aside, seller pulled out of deal last minute.) There is no easy way here unless you are already a contractor. If you are not, and do not have the skills, you will need the owner to stay on and have the NEWCO business get licensed with the owner as licensor....or you can have a responsible employee. You can get a contractor license but it will take you 2-5 years, including work/experience in the field. It is not simply taking a test online. In addition, you can not "rent" a license in California although there are many firms that provide this service. Finally, you can do an asset deal or a stock deal - either is possible.
from The University of Chicago in Sacramento, CA, USA
The only way asset purchase would work if you already have the services (electrical, HVAC, plumbing, etc.) and are buying the assets of the other company. But if you do not have a license and want to buy a company, the licensing experts in California mention that Stock Purchase is the only viable method. Please DM if you need more guidance on this.