Sale of a Licensed Driving School and Continued Use of the Old License Number

A driving school license is not a freely transferable asset. The sale of the business, change of ownership or control, relocation, addition of vehicles, and change in instructors are all events that require agency review. Kevin cannot rely on the asset purchase agreement to use Sunrise's license number as if he were the licensed operator. He must apply for a new school license or obtain whatever prior approval the agency requires for a change of ownership, and he must disclose the sale and the new principals. The relocation to the strip mall requires facility review, including fire and occupancy approval, and the three used sedans must be registered, insured, and inspected as school vehicles before use. The two instructors with pending applications may not teach until their licenses are issued. The investigator should determine whether Kevin has any provisional authority; absent that, the March 15 opening is unlicensed operation. The old license number should not be used to suggest continuity of licensure.

Student records are part of the regulated school's operations and must be maintained and made available to the agency at the licensed location or as the rules require. The former owner's refusal to transfer or provide access to two years of records is a serious compliance problem, and Kevin cannot excuse it by saying the records will be provided 'when needed.' Without records, the agency cannot verify instruction hours, completion certificates, complaints, or refunds, and students may be unable to prove their training. Kevin, as the new operator, has a duty to secure those records or obtain a clear written arrangement for access. The advertising claim 'same license, same school' is misleading because the ownership, location, vehicles, and instructor roster have changed. Even if the name is the same, the licensed entity is not. Misleading advertising can harm students who believe they are enrolling in the original school and can compound the unlicensed-operation problem. The agency should require corrected advertising and a records custody plan.

Immediately, the investigator should document the enrollment, class schedules, vehicles, instructors, advertising, and the license number being displayed. The agency should issue a cease-and-desist notice if Kevin lacks a current license for the new ownership and location, with an opportunity to respond. Student protection is the priority: the agency should require notice to the 20 students, an accounting of fees, and a plan to either refund unearned fees or transition students to a properly licensed school. The two pending instructors must stop instruction until licensed. The agency should also secure the student records or order their production. Long-term, Kevin may apply for a school license, submit facility and vehicle evidence, and demonstrate that he can maintain records and comply with advertising rules. The agency should consider penalties for unlicensed operation and misleading use of the old license number, but should also give Kevin a clear path to compliance if he is otherwise fit. The final order should include findings, corrective requirements, and appeal rights.