SF Community - curious if anyone here has any experience on this topic.
A lot of businesses I've seen in the trades fields (HVAC, Plumbing, etc.) have the current owner hold the license for that trade for the business. Many times, that owner is the only one in the organization with that license. Depending on the state, it may take years of experience for a new applicant to obtain one of those licenses, especially if they've never worked in that trade before.
I had a broker speak with me about this, and while there is the workaround of having the former owner lease out the license to the new owner, I think the current situation is that they can only do that for 11 months (<1 year) if the acquisition is an asset purchase vs. a stock purchase.
My question is, has anyone found other workarounds here that don't involve hiring someone with a license (and thus maybe having your business "held hostage" to an extent)? I was wondering if you do a stock purchase (and thus owner can technically lease out his license to you for 12+ months) and undergo a 338 election to preserve the tax benefits of an asset purchase (assuming purchasing company is an S or C corp)
Would love to hear what current owners of trades businesses have done...
License Continuation for Deals in the Skilled Trades
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by a searcher from University of Pennsylvania - The Wharton School
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