If you are in the process of purchasing a business, make sure that you are aware of all licenses required to operate the seller’s business and that the seller has those licenses in force. The seller’s licenses and permits are important for two reasons. First, you need to understand exactly what authorizations the seller needs to operate. Second, you need to verify that the seller has maintained and still maintains those licenses without any conditions imposed for past violations. There are two basic kinds of licenses. The first kind are licenses for a business to generally be authorized to operate in a state. Businesses that are organized in a state are able to conduct business in that state upon organization. However, companies that engage in businesses other than their state of organization, must qualify to do business in those other states by filing a license for a foreign registration. The second kind of license is industry specific, that is, licenses that are required as a result of the specific industry the seller engages in. Those licenses could be required by local, state and/or federal government agencies, or by an independent industry regulatory body. Many more kinds of businesses are regulated and require specific licenses than one might expect. For example, in Maryland, there are several different types of well-driller’s licenses that a well-drilling company must obtain in order to operate. Make sure that you know the ABCs of the licenses your seller’s business must have, so that you secure those licenses and can lawfully operate on day one after the closing.
ABOUT GLENN D. SOLOMON
Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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