Anyone have experience purchasing businesses that need contractor licenses?

by a searcher from University of Southern California

3 years ago

At my firm we have actually looked at several opportunities in areas such as plumbing, landscaping, paving and HVAC. While we understand that the contractor license requirements may vary from state to state, we are focusing on California at least for the moment. When dealing with a business in which the owner is the holder of the license, is there an uncomplicated way in which the license can be obtained or transitioned onto the new management?

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searcher

the operator would need to have a license for SBA financing -and an advisor told us that they would get some equity in the company and to negotiate a minimum timeframe for them to stay so that you're not SOL if they leave and need to find another licensed person. it might be worth having a back up later on in the company of someone else whos lookingn to get licensed or talk to the licensing board in CA to get names of potential candidates for the future.

3 months ago | like reply | 0 likes

searcher from University of Texas at Austin

I just looked into this for a commercial HVAC contractor in CA. My understanding is you need to relicense because of the change in ownership, but the new qualifying individual can be a "responsible managing employee" - i.e. doesn't have to be you, the new owner.

Seems a little risky to me. You would need to incentivize that person to stick around, otherwise why not go and open up their own shop now that they have their license?

Has anyone actually done this in CA?

3 years ago | like reply | 1 like

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