SBE News

Capitol Connection 10/13/2020

Corporate To LLC, More On Down Payment Limits And “C-10” Rule

Hope is eternal but an expert may also be helpful! Why remodeling is not ‘new’ construction and making something, almost anything, happen in the same day is not likely when several government agencies are involved…

Q:  I was hoping you can tell me what type of Contractor’s License I would need in California to perform the work we do.  My product is a metal panel with heat cable in it, which I install by applying adhesive to the bottom of the panel and lay it on top of the roof shingles then slide the panel edge under the top shingle. I do not penetrate the roof or flashing.  Once the panels are set in place, the Homeowner is responsible for hiring an electrician to come out and connect the cable.

Shauna Krause, writer of Capitol Connection

A:  The most appropriate license classification for the installation of the electrical snow melting panels is the “C-10” (Electrical) classification. However, this is somewhat of a “catch twenty-two” situation.  If you have only installed the panels and not performed any electrical work, you will not qualify for the license. Therefore, you would have to find a Qualifier for the license. 

Q:  After reading your 2 /24/2020 column I have a question on down payments. Are new home construction contracts and home improvement contracts treated the same in regard to down payments?

A:  Thank you for contacting Capitol Services Inc.  New home construction contracts are not considered a Home Improvement Contract.  “Home Improvement” as defined in B&P Code Section 7151 means “the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property and shall include, but not be limited to , the construction, erection, replacement, or improvement of driveways, swimming pools, including spas and hot tubs, terraces, patios, awnings, storm windows, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements of the structures or land which is adjacent to a dwelling house.  “Home improvement” shall also mean “the installation of home improvement goods or the furnishing of home improvement services.” So, no they are handled differently by definition, call again if you need additional help. 

Q:  We are in considering the process of a ‘conversion’, changing from a Corporation to a Limited Liability Company (LLC).  Our FEIN number will remain the same and the company name will stay the same, besides the ending which will change from “Inc.” to “LLC”.  We will be transferring the license number from the corporation to the LLC.  Is it possible to make this happen all on the same day?

A:  It is unlikely that it would happen on the same day due to the fact you need to do two filings at the Secretary of State level prior to the CSLB transferring the license number, and due to their processing times, it is difficult to have it all happen simultaneously.  We can assist you with the process with minimal time in between the conversion, so please call my office to discuss the process and how we can help.