1. (a) Definition. As used in this chapter, a "transfer of ownership" does not include a change in proportionate ownership as defined in §84.105(c) of this title (relating to Change in Form or Proportionate Ownership). Transfer of ownership includes the following:

   1. (1) an existing owner of a sole proprietorship relinquishes that owner's entire interest in a license or an entirely new entity has obtained an ownership interest in a sole proprietorship license;
   2. (2) any purchase or acquisition of control of a licensed general partnership, in which a partner owning 10% or more relinquishes that owner's entire interest or a new general partner obtains an ownership interest of 10% or more;

   3. (3) any purchase or acquisition of a licensed limited partnership interest:

      1. (A) of 10% or more of ownership;
      2. (B) in which a general partner relinquishes that owner's entire interest in a licensee; or
      3. (C) in which a new general partner obtains an ownership interest in the licensee. A transfer of ownership occurs regardless of the percentage of ownership exchanged of the general partner;
   4. (4) any purchase or acquisition of control of 10% or more of the outstanding voting stock of any licensed privately-held corporation, or of 51% or more of any privately-held corporation which is the parent or controlling stockholder of a licensed corporation. The term also includes stock ownership changes that result in a change of control (i.e. 51% or more) for a publicly-held company;
   5. (5) any purchase or acquisition of control of 10% or more of a membership interest of any licensed limited liability company, or of 51% or more of any limited liability company which is the parent or controlling member of a licensed limited liability company;
   6. (6) any acquisition of a license by gift, devise, or descent; and
   7. (7) any purchase or acquisition of control of a licensed entity whereby a substantial change in management or control of the business occurs, despite not fulfilling the requirements of subsection (a)(1) - (5) of this section, and the commissioner has reason to believe that proper regulation of the licensee dictates that a transfer must be processed.
2. (b) Approval of transfer. No license may be sold, transferred, or assigned without written approval by the commissioner.

3. (c) Filing requirements. An application for transfer of a license must be submitted on forms prescribed by the commissioner and in accordance with the rules and instructions. The application for transfer shall include the appropriate fees and the following:

   1. (1) Application. The instructions in §84.102 of this title (relating to Filing of New Application) are applicable to this filing.
   2. (2) Registered offices. The instructions in §84.102 of this title are applicable to this filing.
   3. (3) Disclosure of Owners and Principal Parties. The instructions in §84.102 of this title are applicable to this filing.
   4. (4) Appointment of Statutory Agent and Consent to Service. The instructions in §84.102 of this title are applicable to this filing.
   5. (5) Personal Affidavit, Personal Questionnaire, and Employment History. The instructions in §84.102 of this title are applicable to these filings.
   6. (6) Fingerprint cards. The instructions in §84.102 of this title are applicable to this filing.

   7. (7) Evidence of the transfer of ownership. Documentation evidencing the transfer of ownership must be filed with the application and should include one of the following:

      1. (A) a copy of the asset purchase agreement when only the assets have been purchased;
      2. (B) a copy of the stock purchase agreement or other evidence of acquisition if voting stock of a corporate licensee has been purchased or otherwise acquired; or
      3. (C) any document that transferred ownership by gift, devise, or descent, such as a probated will or a court order.
4. (d) Permission to operate. No business under the license shall be conducted by any transferee until the application has been received, all applicable fees have been paid, and a request for permission to operate has been approved. A request for permission to operate during the pendency of the application may be denied. This subsection does not apply to a change of control of a publicly-held corporation or a change due to the death or disability of an individual.
5. (e) Purchaser operating under seller's license. A written agreement whereby a seller grants a buyer the authority to operate under the seller's license pending approval of the buyer's new license application is authorized. The agreement must provide that the seller accepts full responsibility to any customer of the licensed business for any acts of the buyer in connection with the operation of the business. The written agreement between the seller and the buyer must be submitted to the commissioner with a request to operate under the seller's license not less than 10 business days after the closing or the date of the sale. The agreement shall be for a defined period of time as provided in the agreement. Two companies may not simultaneously operate under a single license. If a seller grants another company permission to operate under the seller's license, the seller must cease operating under the authority of the license.
6. (f) Application filing deadline. Applications filed in connection with transfers of ownership may be filed in advance but must be filed no later than 10 calendar days following the actual transfer. Failure to meet the application filing deadline does not invalidate transactions unless the agency has obtained a contrary finding through the administrative process.

Source Note:The provisions of this §84.104 adopted to be effective August 31, 2006, 31 TexReg 6652.