13
CONSIDERATIONS FOR THE ACQUIRING FIRM. The acquiring firm must verify that the target firm has met the above licensing and compliance obligations. Additional steps will depend on the firm’s post-transaction goals. Management should assess the current situation and develop a structured change control plan. Start by understanding: ■ Firm licensing considerations. When considering firm licensing during M&A, the acquiring firm must first determine where they and the target firm are currently licensed. This will allow them to identify any gaps in licensure and determine if additional licenses will be required in new jurisdictions or for new specialties. ■ Professional licensing and personnel considerations. When an M&A deal occurs, the acquiring firm must consider where its professionals and the target firm’s professionals are currently licensed. It is important to identify responsible license holders (qualifiers) at the target firm and determine if they will remain with the company after the acquisition. This will inform any required updates with licensing boards. Additionally, the acquiring firm must determine whether any individuals need to obtain new licenses, complete continuing education requirements, or pass exams as a result of the M&A. These changes to qualifiers must often be reported to licensing boards within 10 days, so it is essential to act quickly to avoid penalties. ■ Entity and secretary of state considerations. When considering the impact of an M&A on entity and secretary of state requirements, the acquiring firm must determine the fate of the acquired entities, whether they will be dissolved or remain active. Additionally, it’s crucial to ensure that the new ownership structure aligns with state-specific entity requirements. This may necessitate the formation of new entities or the registration of existing entities as foreign entities in different states. Finally, the acquiring firm must address any required legal updates, such as changes to the name, address, registered agent, or management team. ■ Rebranding and legal name changes. Many acquiring firms opt to change the name of the target firm or undertake a full rebranding. However, firm naming requirements vary by state and are often regulated by statute. We recommend researching these requirements before making any naming decision. MAINTAINING REGULATORY REQUIREMENTS AND ORGANIC GROWTH. Of course, few firms grow entirely through M&A. Some natural, aka organic, growth is expected. In addition to the above, the firm faces a core set of ongoing responsibilities, for example:
Maintaining firm and professional licenses.
■
■ Acquiring new licenses when expanding into additional states or hiring new professionals. ■ Meeting ongoing secretary of state obligations, such as registered agent designations and annual report filings. After an acquisition, any new licenses, entities, and regulatory requirements become part of the firm’s overall regulatory portfolio. Establishing a robust program to maintain them helps firms meet these requirements efficiently, ensuring operational continuity and long-term success. “Your firm’s licensing requirements will evolve over time, particularly as it grows through M&A. Proactively addressing these regulatory considerations ensures your firm remains in good standing, competitive, and positioned for long-term success.” TAKING THE NEXT STEPS. Your firm’s licensing requirements will evolve over time, particularly as it grows through M&A. Proactively addressing these regulatory considerations ensures your firm remains in good standing, competitive, and positioned for long-term success. By taking these steps early, you can mitigate risks, control costs, and protect your firm’s reputation. Zweig Group and Harbor Compliance offer a comprehensive solution for AEC firms navigating mergers and acquisitions. Zweig Group provides expert guidance through every stage of the M&A process, from strategic planning to post-merger integration, ensuring firms make informed and successful growth decisions. Meanwhile, Harbor Compliance manages the complex regulatory requirements that come with acquisitions, including business licensing, tax registrations, and entity management. For guidance planning or undergoing your next transaction, contact the experts at Zweig Group. To discuss how you can outsource the management of your licensing and related registration needs, visit this page. James Gilmer is strategic partnerships manager at Harbor Compliance. Contact him at jgilmer@harborcompliance.com.
ZWEIG GROUP’S MERGERS & ACQUISITIONS CONSULTING SERVICES Whether you’re on the buy- or sell-side of a deal, Zweig Group’s full-scale Mergers & Acquisitions consulting team can help you find and evaluate candidates and then structure the transaction – managing the complicated process from conception to the closing table. We approach each project as a cross-functional team with different expertise working toward a common goal. With an extensive network that spans North America, we blend industry and sector knowledge with experience across the M&A lifecycle to help you capture value for shareholders. Click here to learn more!
THE ZWEIG LETTER MAY 5, 2025, ISSUE 1584
Made with FlippingBook flipbook maker