(1) A guaranteed price contract shall designate a provider who has agreed to furnish the merchandise or funeral or cemetery services specified in the contract upon the death of the contract beneficiary. If the provider designated is not the prepaid contract seller of the contract, the provider shall be made a party to the prepaid contract before any consideration is paid and the prepaid contract is not binding on the contract buyer until the provider has been made a party to the prepaid contract.

    (2) In addition to the registration otherwise required by the terms of this act, the provider which has agreed to provide merchandise or funeral or cemetery services pursuant to a guaranteed price contract shall, at the time the prepaid contract is entered into, possess any license or registration required in order to provide the funeral or cemetery services, pursuant to article 18 of the occupational code, 1980 PA 299, MCL 339.1801 to 339.1812, or the cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543. If a provider is required to possess a license or registration to provide the services included in a prepaid contract, a contract seller who does not possess a license or registration to provide the services must disclose to the contract buyer or prospective contract buyer that it cannot perform those activities required to be registered or licensed.