By Shauna Krause, President, Capitol Services, Inc.
A ‘rose by any other name smells as sweet’ may apply to flowers, but not contractor’s business names. A business name; how it applies to trade and structure of the entity all matter in determining what you can legally call yourself and how you advertise contractor services as you will discover in these Q and A that ‘rose’ to the occasion…
Q: We have been licensed for many years in California as a corporation. Now that California is licensing Limited Liability Companies (LLC) we recently applied for a license for our LLC, which is how we conduct business in many other States. We are General Engineering contractors and our business name is our owner’s name, followed by “Construction LLC”. Our application was rejected because the CSLB is stating that we cannot use the word “Construction” in our name. They are requiring that we adopt a ‘doing business as’ name (dba). For obvious reasons we don’t want a different name in California than we have in other States and the President is arguing that there must be some way around this. Is there a law that you can point me to that I can provide to our President with regards to contracting company companies using “Construction” in their business name?
A: There is no code section that specifically addresses the use of the word “Construction”. B & P Code Section 7059.1 states that a business name needs to be compatible with the classification that is being performed. The CSLB has determined that General Building (“B”) contractors are the ONLYlicense holders that can use “Construction” in a business name without giving descriptive or limiting words. Therefore, you can still use the word “Construction” in your name, but it needs to be prefaced with a descriptive word. As an example, “John Smith Engineering Construction LLC” would likely be acceptable.
Q: I currently have a Contractor’s license for my Corporation. I want to start another separate company and obtain a second license. Is it possible to add a “dba” to the existing license, and also use that same ‘doing business as’ name for the new company?
A: Yes, the CSLB allows multiple companies to use the same “dba” name.
Q: We have hundreds of work trucks throughout California and the business name on the trucks is a shortened version of our full business name. We were recently cited by the CSLB for not having our full business name on one of our trucks. We have no problem paying the fine, but without having to update our hundreds of trucks, how do we make sure this doesn’t happen in the future?
A: The business name that you have on your company vehicles is considered “advertising” so yes it must match the business name on your license. Since you don’t want to change all of your existing trucks, I would suggest adding the shortened version of your company name that you have on your trucks as a DBA on your license. That would require a name change form with the CSLB.
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 email@example.com, or write us at Capitol Services, Inc., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at www.cutredtape.com.