By Shauna Krause, President, Capitol Services, Inc.
Word of mouth, rumor and conflicting views of the complex rules of contracting don’t always pan out, so how about an expert opinion? Let’s start with RMO rules, advise business leadership and ‘hazard’ an answer on a question arising from the Los Angeles area fire disaster…
Q: I am a business broker and one of my clients is looking to buy a contracting business and hire a Responsible Managing Officer (RMO), which obviously has licensing requirements. The individual he is considering is currently an RMO for another company, which the individual does not want to disrupt in any way. My client is going to make an asset purchase where he is starting his own company, separate from the existing company. I’ve been reading online about RMO’s and their ownership requirements and have been getting conflicting information. Is there a Bond my client can put in place for the RMO to prevent having to provide 20% ownership, and more importantly, voting rights of his new business?
A: Thank you for contacting me. If the potential RMO is intending to keep both licenses which he qualifies Active, then he/she would be required to own at least 20% of each company. There is no bond which can be put in place to prevent that requirement. RMO’s are not required to have ownership, it’s only when they are qualifying multiple licenses when the ownership comes into play.
Q: We need the HAZ certification added to our “A”/“C-12” license to help with the fire disaster in Los Angeles. We have a subsidiary company who holds the HAZ cert, but the person who qualified their HAZ cert is not listed on our license. Are we able to bring the HAZ cert over to our license with that individual who has already passed the exam?
A: The Hazardous Substance Removal Certification is considered an “add on” to an existing classification an individual already holds. Therefore, the person you designate as the Qualifying Individual for HAZ certification is required to already hold one of the required classifications on your existing license. In order to add the certification to a license, an individual must already be qualifying for one of the following classifications on the license you are adding it to: “A” (General Engineering), “B” (General Building), “C-12” (Earthwork and Paving), “C-36” (Plumbing), “C-57” (Well Drilling), or “C-61/D40” (Service Station Equipment and Maintenance).
Your existing “A” or “C-12” Qualifier can apply and take the exam for the certification. Let me know if you would like our assistance with that!
Q: We are getting ready to update our Officer/Director list and we will be electing new Directors. In total there will be eight. They will not be listed on our CA Secretary of State (SOS) filings, just on internal documents. Do we need to notify the CSLB of every Officer/Director we add to our business?
A: The CSLB requires that your contractor’s license’s list of personnel matches the CA Secretary of State’s list of personnel. If you aren’t listing your new Directors on the CA SOS records, you do not need to update the CSLB with those new Directors.
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While knowledge is power, knowing where to go for the answers is half he battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com