Capitol Connection 02/22/2021
College & Military Experience, Changing Business Entity and Bond Transfers
As our first two contractors learn, having confidence in your business decisions comes from having expert knowledge of the rules in the game.’ Better to have an ‘ounce’ of prevention to avoid requiring a ‘pound’ of a cure if you’re wrong. A lesson we are all also sharing now with stopping the spread of Covid-19. As your longtime contractor licensing expert, our last inquiry reveals some questions are just not for me!…
Q: My license is up for renewal as I am typing this. I wasn’t sure whether to sign it and renew it or not. I have been operating as a Corporation (I know it’s not proper) for the past year. I don’t want to run in to any trouble with the CSLB upon renewing my license. Do you have any advice?
A: Any time you have a change in your business entity, you absolutely need to notify the CSLB. That being said, there are many times when contractors fail to notify the CSLB of their change. The best thing at this point, is to notify them. Which means you will need re-apply for the license and if you meet the qualifications, you may be able to transfer your license number to your corporation. Contact me for more information or if you’d like our assistance.
Q: We have an employee obtaining a “back up” (Sole Proprietor) license for our company. The current Qualifier is planning to retire at the end of the year. The employee has the option to have the license issued “Inactive” and therefore, not requiring a bond. My boss is wanting to get a bond on file for him, regardless, so the process is much quicker if we need to go through the replacement process. It makes sense to me, but I just have to confirm that the bond we obtain for his personal license will transfer to the new license. Will that work?
A: Unfortunately, bonds are not transferrable. If your employee doesn’t intend on using his/her Sole Proprietor license, he/she should probably have it issued Inactive. When your current Qualifier retires, you will need to obtain a new bond, assuming the new Qualifier owns less than 10% of the company.
Q: I have a Bachelor and a Master’s Degree. I also served in the military for four years. I am looking to buy a Contracting business doing concrete work. I think between my education and military experience, I can qualify for the license. I’m still working with whether it will be an asset sale or a stock sale. Can you tell me which is better and whether I would qualify for a Contractor’s License?
A: First of all, I cannot advise you on the Stock sale versus Asset sale, you should probably contact an attorney for that question. As a licensing expert, I can tell you, you need to have four years of full-time experience in the trade you are applying for. College degrees will grant you up to three years of credit, but you still need to document that one year of “hands-on” practical experience doing concrete work.