Ownership continuity threshold

Definition

The share of equity that must carry over for a transfer to avoid a fresh state application.

Why It Matters

Most ownership changes at a pawn shop require a new application to the state, which is a wait a buyer has to plan around. The escape hatch is a continuity test: no application is required if holders of at least ninety percent of the equity before the change continue to hold at least ninety percent after it. That is a narrow gate and it shapes the structure of a staged buyout far more than tax treatment does. Establish which side of the threshold a proposed structure falls on before agreeing to it.