Licence re-application
Licence re-application is applying for a business licence or regulatory registration in the buyer’s own name rather than assuming an existing one carries over, because most licences, permits and registrations are issued to a specific person or entity and do not automatically transfer with a change of ownership. Missing this step can leave a business unable to legally operate on day one.
Buyers sometimes assume that if a business has operated under a licence for years, the licence itself is part of what they are buying. Usually it is not. Most regulatory licences are personal to the holder, and a sale, especially an asset sale, typically requires the buyer to qualify and apply in their own name, sometimes before closing and sometimes within a window afterward.
Examples of licences that commonly need re-application
- A liquor sales licence, which in Ontario is administered by the AGCO and has its own transfer process
- Commercial vehicle registration, which in Ontario runs through the CVOR system
- Motor vehicle dealer registration, which in Ontario is administered by OMVIC
- Municipal business licences, health permits and industry-specific certifications
Why the timeline needs to be built into the deal
Regulatory processing takes real time, and a buyer who only starts the application after closing can end up owning a business it is not yet licensed to run. The purchase agreement should treat licence approval as a closing condition where the buyer cannot legally operate without it, with the timeline built around the regulator rather than around the parties' preferred closing date.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Alcohol and Gaming Commission of OntarioRegulatorTransferring a Liquor Sales Licence
- 02Government of OntarioGovernmentCommercial Vehicle Operator's Registration (CVOR)
- 03Ontario Motor Vehicle Industry CouncilRegulatorHow to Become a Dealer in Ontario
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