By Shauna Krause, President, Capitol Services, Inc.
I will give one contractor an answer by the ‘numbers’. First a simple answer before things become real complicated because we’re not in Kansas anymore…
Q: We need to add a “C-16” (Fire Protection) classification to our “A” (General Engineering) license. We are working on finding someone to sit for the exams. In the meantime, if we were to have our existing “A” Qualifier sit for the Fire Protection exam, do we need to have a different Qualifying Individual be added to the license with the “C-16”, or is one Qualifier for all the categories on our license sufficient?
A: Thank you for contacting me. One Qualifier is sufficient to qualify for all the classifications associated with your license.
Q: We have a complicated situation we need your help with. Our Kansas company is currently licensed in CA, we’ll call it ABC Inc. Our CEO is the Qualifying Individual. There has been a Company re-structuring and we now have two LLC’s. ABC Inc is now ABC LLC. The second company will be called ABC California LLC and it needs the same contractor’s license. We would like to use our CEO as the Qualifier for that license as well.
In California Contractor License Law & Reference Book (Chapter 1, Section 1, Sub-section 20), I see that two entities can share a Qualifier if there is “common ownership of at least 20 percent of the equity of each firm for which they act as the qualifier”. In our situation, both ABC LLC and ABC California LLC are owned by the same Holding company so that’s where our common ownership lies. What forms do we need to file with the CSLB and what supporting documents need to be provided to “prove” the relationship?
A: A person can only qualify for two licenses if one of the following conditions exists:
- The individual owns at least 20% of each company,
- One entity owns at least 25% of the other, OR
- The personnel (meaning Officers, Members, Managers) are the same.
You can likely qualify based on #3 because the Holding Company would be the sole Member of each entity, BUT you have never notified California SOS or CSLB that the existing licensed corporation has converted to an LLC.
Therefore, you would first want to update the existing license to an LLC and then apply for a license for ABC California LLC using the same Qualifier. Supporting documents would include an organizational chart which shows the relationship. For the additional forms and supporting documents required, please contact my office and we can thoroughly discuss pushing everything forward and the sequencing of the process.
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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.