In August 2026, we hosted Legal Office Hours on “Licensing and Regulatory Issues in Acquisitions,” where we discussed the licensing and regulatory considerations buyers should evaluate when acquiring a business, including license transferability, key license holders, deal structure, and employee retention.
Question Timestamps
- 25:18: Could you give just a little bit more on the milestone, the flat fee, and milestone-based payment, and how it’s scoped to the project? Maybe just elaborate on that a little bit more for people.
- 30:40: Bill, that point that you said about generally we think about sales as the challenge in business, but in the trades, it’s actually often not generating demand but supplying the services, meaning hiring. Where were you going with that? How does that play with licenses and regulation?
- 34:11: With respect to a licensed employee replacing the seller as the ongoing license holder in an SBA deal, you noted that state law may or may not require that employee to, quote, join the buying group, as you said. You guys said so. Does that mean they would be compensated? They would need to be given an equity stake in the business. I assume that’s exactly what that means. And then would they have to PG the loan? Do you guys have any examples you could share?
- 38:19: Could you talk about what is the most common or best strategy for securing licensing for a trades business, where the owner holds the license, but there are several employees that have the required work experience to hold the license, but don’t have it yet?
- 39:55: I have a professional engineer license, and I’m considering MEP, which is commercial HVAC, electrical, and plumbing, MEP service businesses. Would my professional engineer license make it easier for me to obtain the licenses needed for these trades businesses, or even maybe exempt me from certain requirements that are obstacles for others, but maybe not for me?
- 41:24: Will you review contracts drafted with Claude by someone who’s not a JD? So the buyer is not a lawyer, but they’ve drafted their contracts with Claude.
- 42:40: Can you speak to the issue of whether you can rent a license from a license holder that is not active in the business? I’ve had a couple brokers and franchises mention this, but I don’t believe it would be legal—at least not in California.
- 43:03: What exactly would this mechanic look like? (Follow-up question to 42:40.)
- 44:57: If there is a key employee in the business that is intended to be the license holder post-close, for example, a master electrician that will hold the license, how best to approach or recommend this person to enter into a long-term employment agreement? How to incentivize them?
- 48:54: This makes it seem like buying a trades business is very difficult. Of course, we’ve had countless people who do on the podcast, and it’s the most common kind of category where people are buying businesses. But as the SBA has tightened things down, have you noticed searcher interest fall off? How have you seen this play out in the market?
- 58:27: What’s your recommended sequence? When in the deal timeline should regulatory diligence start relative to LOI in the SBA process? I think you’ve answered that, but let’s hear it again.
- 56:28: But didn’t you guys also say earlier that, like, the more you know, the better because, in theory, it will affect deal structure? So, in other words, if you have the information, it could show up in your LOI.
- 58:06: Have you closed any transactions using ROBS multiple-part? Have you done any ROBS deals? Number one, and then if so, are ROBS a better fit for a trades business given the C-corp requirement?
If you need further assistance or are in the process of negotiating a letter of intent, contact us at info@barlowwilliams.law and we will be happy to discuss your situation.