Does a trades business's manufacturer certifications transfer, or does the new owner have to requalify?
Manufacturer certifications — the kind that authorize a trades business to install, service, or warranty a particular manufacturer's products — are generally tied to specific qualified individuals and, often, to the specific corporate entity that was originally certified, rather than being a freely transferable asset. Whether a new owner can simply continue operating under the seller's existing certification, or needs to requalify, depends on the manufacturer's own program requirements, which vary considerably from one manufacturer to another and aren't governed by a single consistent rule.
In a share sale, since the same corporate entity continues, there's a better chance the certification continues without a fresh application, though the manufacturer may still want confirmation that qualified individuals remain in place. In an asset sale, a new legal entity is typically involved, which more often triggers a requirement to reapply or requalify from the manufacturer's perspective, regardless of how experienced the buyer's technicians actually are.
Because losing a valuable manufacturer certification can materially affect the business's ability to keep serving existing customers under warranty programs, confirming directly with each relevant manufacturer what happens to certification status under the specific deal structure is worth doing before the purchase price is finalized.
Key takeaways
- Manufacturer certifications are generally tied to specific individuals and often to the certified entity itself.
- Requirements to requalify after a sale vary by manufacturer, with no single consistent rule.
- Share sales have a better chance of preserving certification without a fresh application.
- Confirm certification status directly with each relevant manufacturer before finalizing price.