Can a municipality require a whole new licence application instead of just a change-of-ownership form?

Yes, this is common, and it depends entirely on how the specific municipal licensing regime is set up rather than any single Ontario-wide rule. Some municipal licences have a simple change-of-ownership or change-of-operator process for an existing, valid licence, while others treat any change in the licensed entity as requiring a full fresh application, reviewed the same way a first-time applicant would be — background checks, inspections, and all, regardless of how long the business has held the licence previously.

Which approach applies often depends on the type of licence and the specific municipality's bylaws, and it's not safe to assume a lighter change-of-ownership process is available just because it exists for some other licence type or in some other municipality. A full re-application process generally takes longer and carries more uncertainty than a simple change form, which matters for your closing timeline.

Because this affects how much lead time you need before closing, confirm the actual process with the relevant municipality directly rather than assuming. A Treadstone business lawyer can help identify what's actually required for each licence involved in your sale.