Has anyone successfully been able to acquire a plumbing company in the NY tri-state area? It seems the licensing requirements are too restrictive in these municipalities for searcher acquisitions. That is, it seems like you can hold master plumbing license if and only if you have 51% ownership.
Has anybody figured out structures where a searcher can run the company without a master license and still own >51% of the company? Please comment if you can connect me with anyone who's figured this out and I'll DM you.
I've heard about having multiples classes of shares and having a master plumber who is part of the company own 51% of a subordinated class. I've also heard about an opco/JV setup (how PE tends to do it), but I would think both of those routes would run afoul of SBA requirements.
Does anyone have any experience to the contrary?
First check with the business and ask if the contractor license is associated with the business or individual. If its associated with the business then you need to acquire the business as a stock purchase. If its associated with the individual and are doing an asset sale you can: 1. You either get the license yourself 2. You get the number two person to get the license - there are other things to consider here... (like he leaves to start their own company) 3. You find a partner with the experience, that has the license or takes the test. 4. You get the current owner to remain involved, then he must be regularly employed by the company and actively involved in the operation of the business at least 32 hours per week 5. If you’re using an entity such as a corporation, then the corporation itself must be licensed. You’ve got to get the corporation itself licensed.) You can get an entity licensed in one of two ways: (1) At least 20% of the ownership must be in the hands of a licensed individual (known in CSLB licensing parlance as a “Responsible Managing Officer,” or RMO); or (2) you need to employ a licensed individual (known as a “Responsible Managing Employee,” or RME). As to option (2) in the prior sentence, by “employ,” you have to employ them for at least 32 hours a week, have Workers Compensation insurance in place, etc..