SBE News

Capitol Connection #1053

Always a good idea to ‘look’ before you leap into new business! Protecting your license and bid opportunity beyond an unexpected turn of events should be part of your business plan, as we learn from these contractors…

Shauna Krause, writer of Capitol ConnectionQ: We are forming a new entity to obtain a new Contractor’s License. We haven’t decided whether we are going to apply as a ‘C’ Corporation, ‘S’ Corporation, or LLC. We are still discussing the options with our Attorney. Do we need to decide first before applying for the license?

A: You do need to decide whether you want to operate with the license as a corporation vs. an LLC prior to submitting an application, however, the CSLB doesn’t distinguish between a ‘C’ Corporation and an ‘S’ Corporation. I am not a tax expert, and you should consider consulting one, however, it is my understanding the difference between a ‘C’ and an ‘S’ Corp is the entity’s filing status with the Internal Revenue Service, which the CSLB doesn’t get involved in.

Q: Our Qualifying Individual passed away and we in the process of putting the paperwork together to update the license. We filled out an application to replace the Qualifying Individual, but on the Disassociation Request form, it asks for the signature of the disassociating person, which is obviously not possible. What do you suggest?

A: Sorry to hear that. Any individual listed on the license is authorized to sign for changes to the license. I looked up your license and you have several other Officers listed, so any of them can sign the Disassociation. However, since you are filing the Replacement of Qualifier application, there is a section which allows you to list a date of disassociation for the current Qualifier, therefore you don’t need to submit the Disassociation Request form.

Q: We have a family business which has been licensed in Arizona for over 30 years and we now need to get a license in California. My father who was the Qualifying party for our Arizona license passed away three years ago. Because we have been licensed for so many years, we have been Exempt from having a Qualifying party since he passed. All that being said, can we apply in California for reciprocal agreement with me as the Qualifying Party?

A: In order to qualify for reciprocity, your Qualifier has to have been actively licensed in the equivalent classification for five out of the last seven years. Since you haven’t been listed as the Qualifying individual on your Arizona license, you will not qualify for Reciprocity. You will be required to take both the law and trade exams.

By Shauna Krause, President, Capitol Services, Inc.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email, or write us at Capitol Services, Inc., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at