What is the result of a total change of a firm's ownership on the current certificate?

What is the result of a total change of a firm's ownership on the current certificate?

• A. Invalidates
• B. Renews
• C. Extends
• D. Maintains

Answer: (A)

When ownership of a firm changes completely, the certificate tied to that firm no longer applies to the new owner. Licenses and certificates are issued to a specific business entity and the people responsible for that entity; a total change in ownership creates a different entity, so the existing certificate cannot authorize the new ownership. Therefore the current certificate must be invalidated and a new certificate issued to reflect the new ownership. Renewing, extending, or maintaining the old certificate would still link it to the previous ownership, which isn’t appropriate in this case.

When ownership of a firm changes completely, the certificate tied to that firm no longer applies to the new owner. Licenses and certificates are issued to a specific business entity and the people responsible for that entity; a total change in ownership creates a different entity, so the existing certificate cannot authorize the new ownership. Therefore the current certificate must be invalidated and a new certificate issued to reflect the new ownership. Renewing, extending, or maintaining the old certificate would still link it to the previous ownership, which isn’t appropriate in this case.