By Shauna Krause, President, Capitol Services, Inc.
Sometimes you can qualify for all work and no play! A contractor discovers that one Bond that you can’t release until there’s another, and while most regulations are black and white, isn’t there always an ‘exception’ to a rule?...
Q: I sold my Contracting business which I am the Qualifier for. The purchase agreement states I will remain the Qualifying Individual until the buyer can take over the license, or hire a qualified individual to replace me. With my ownership falling below 20%, I know I must now Inactivate my personal license while still acting as the Responsible Managing Officer (RMO) for the company I just sold. With less than 20% ownership, does that also mean I am required to work for the Company 32 hours a week? If so, I may be encouraging the buyer to speed up the process of replacing me!
A: As long as you remain an Officer (RMO) on the license and regardless of ownership, you are not required to work a certain amount of hours per week.
Q: We recently purchased another entity, and I am now maintaining their licenses in addition to the ones I was already in charge of. To make my life easier, I would like to get new Bonds in place for the new entity under the same surety company we use for our other licenses. What is the process for releasing the Bonds on record so that I can provide new Bonds from our Surety Company?
A: The first step would be to obtain the new Bonds. The CSLB will not “release” Bonds on file, however when you submit another, the CSLB puts the newest one on file and replaces the old one.
Q: We frequently do affordable housing work. We often are requested by private developers who are the owners of the project. It is known that favorable credit is given to Joint Ventures where one of the entities is a Small Business Enterprise. We are looking at a bid proposal that we’d like to bid on with another licensed SB Contractor, and in my short experience with license law, I seem to remember that you cannot bid on work without a license. However, the Joint Venture creation is dependent on whether we are awarded the project. I’m wondering if there’s an exception for Joint Ventures? Are we permitted to bid with the intention of obtaining a license if we are awarded the job?
A: There is an exception. B&P Code Section 7029.1 states two licensed Contractors may jointly bid for the performance of work prior to obtaining a license, however they cannot jointly enter a contract without first obtaining a Joint Venture Contractors license.
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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 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.