License transfer

Definition

Whether the permit to operate moves with the business or stops.

Why It Matters

Some licenses travel with an entity and die in an asset sale. Some are personal to the holder and cannot travel at all. Some require the buyer to qualify before the state will reissue. Which of the three applies decides the deal structure instead of following from it, so the answer belongs in the first week of diligence rather than the last. Where a qualifying individual is required, that individual is often the seller, which turns the transition agreement into a condition of operating.

In numbers: Where a license is personal to the seller, a buyer either qualifies themselves or hires a qualifier, and on a $4M deal that can move the closing date by months.