Don’t Overlook Licensing Requirements During the M&A Process
A good measure of your legal team’s due diligence capability is the attention that is paid to licensing requirements while everyone is in the M&A scrum. We are often consulted only days before the merger documents are supposed to be signed, when one of the attorneys realize that “Newco” may not be able to operate - especially if there are changes with responsible party officers and professional qualifiers in the surviving company.
Some Authorities will allow a grace period for companies to square away the licensing when they undergo a change of the type listed above. What is needed is comprehensive knowledge of the requirements in all active jurisdictions so the paperwork can be triaged and prioritized based on the critical dates imposed by the various authorities. In addition, all measures should be taken by the expiring company to maintain and renew licenses, so everything is in good standing - allowing transfers to occur cleanly, if allowed.
If your company is contemplating a merger or acquisition, you can bring glory to the Compliance Department by proactively researching licensing requirements for change of structure, change of officer, or qualifier issues. Nobody wants the surviving company to trip over red tape right when they are trying to hit the ground running.
About The Author
Andrea Jaffe currently serves as Vice President of Operations for Business Licenses, LLC where she is responsible for corporate operations and manages a team of licensing professionals. Prior to Business Licenses, LLC, Andrea was the Chief Financial Officer for DoubleTree Hotel- Tarrytown where she was responsible for day-to-day financial transactions as well as compliance with corporate, tax, and other financial reporting requirements. Andrea has also served as the Manager of Operations of the Sales Tax Group of CCH-Wolters Kluwer where she was responsible for operations, human resources, and site management for the Sales Tax Group. The group developed and supported sales tax databases utilized in ERP systems for retail, restaurant, grocery, telecom, and utility companies.
Andrea is a graduate of City University of New York-Hunter College where she received her Bachelors in Economics. She received her Masters in Accounting from Fairleigh Dickinson University.