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Can license holder incorporate or transfer his license
October 2, 2020
Can license holder incorporate or transfer his license
            With the question of a qualified manager ‘renting’ out his license coming up I had a question for you:
In most states (in particular Calif.) can a Qualified Manager make himself an LLC  or corporation for his license?
            In order to qualifier for an alarm license, in most if not all licensed jurisdictions, the individual must pass certain requirements, possess certain qualifications, including education and testing.  Think of it as a driver's license and ask yourself, can someone with a driver's license change to a corporation or can he transfer the driver's license?  The answer is clearly no.
            Same with the alarm license.  It's held by someone who has presented the necessary qualifications for the license.  The state has that person's finger prints and application with personal information.  It's that person who gets the license.  
            A person who can qualify for a license can get that license in his own name, or can qualify for a business entity.  I suggest a Qualifier Agreement when the license holder is qualifying for the entity.  The only exception would be a single stockholder corporation or single member LLC where the license holder is that single person.
            So the licensed individual cannot incorporate or form an LLC for purposes of holding the license for another entity.  It's the individual who is employed or otherwise engaged by the business entity.
            Likewise the license holder cannot transfer the license to a buyer.  I am almost amused when I see a Term Sheet for a deal where it calls for the license to be transferred.  That provisions is usually accompanied with loads of other ridiculus or at least non-cutomary provisions.  Lot of time wasted by the parties.   Next time bring in counsel at the start and save time.  
            If you're a potential license holder or company looking for a license holder, contact our License Coordinator Eileen Wagda at 516 747 6700 x 312 or email her at  Eileen also serves as our Contract Administrator.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301