Capitol Connection #1079
Yes, and Yes again gets the Q&A started. Since making the business structure a legal option in CA, contractor interest has been ‘building’ in Limited Liability Company or LLC transfers. Finish with a ‘No’ and a ‘walk-in’ solution…
Q: I have been advised by my attorney to transfer my Sole Proprietorship business to either a Corporation or an LLC. Does your company assist with this, and do I have a choice of transferring my license number to the corporation/LLC, or will the new company get a new license number?
A: Yes, we can assist you the process of obtaining a license for your new company. If you own at least 51% of the new corporation or LLC, you have the option to transfer the license number. Just be aware that if you choose this option, you can never get the license number back as a Sole Proprietor in the future. You can also opt to have a new license number issued.
Q: If I convert my Sole Proprietorship to an LLC and I elect to have the LLC have its own license number, can I still be a Partner or owner of another separate company? Will I need get separate bonds and insurance, essentially paying double for bonds and insurance?
A: The CSLB does not have a limit as to how many contracting companies you can be an owner or partner of. However, you can only qualify up to three Active licenses at the same, as long as one of the following conditions exists: a) you own at least 20% of each company you’re qualifying; b) one licensee directly owns at least 20% of the other; or, c) the majority of the personnel on the license are the same.
With regards to the Bonds and insurance, yes, the LLC will be required to have its own Bonds and insurance. In addition to the $15,000 Contractor’s bond required for all contractors, LLC’s are also required to have a $100,000 LLC/Worker Bond. Additionally, LLC’s are required to have at least $1 million in General Liability insurance coverage.
Q: We have a Contractor’s license with multiple classifications on it. I currently hold the “C-43” classification. Our “C-20” (HVAC) Qualifier left and my company wants me to replace him. I know I will need to take an exam, but what are the other requirements? Do I need to take the Law exam for the “C-20”?
A: Besides the Trade exam, you are required to document at least four years of full-time work experience in the “C-20” trade. HVAC and Refrigeration (“C-38”) contractors are also required to have a CFC certificate. You do not need to take the Law exam since you already passed it when you obtained the “C-43” (Sheet Metal) classification.
Q: Our license is set to expire at the end of the month. I called the CSLB and was told they are taking a couple weeks to process renewals. If I were to walk the renewal into one of their field offices, will they process it the same day?
A: No, they would not. They also only accept fees at the Sacramento office. Contact us if you’d like us to deliver the renewal for you and get a date stamped copy. A true benefit of my Capitol Service’s office being a stone throw away from the Capitol, so to speak!
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 firstname.lastname@example.org, or write us at Capitol Services, Inc., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at www.cutredtape.com.