from Jonathan J. Sweet, LAW OFFICES OF JONATHAN J. SWEET
This is very good news for contractors. The State of California is finally allowing contractors to use the LLC (Limited Liability Company) form of business with which to operate. Other types of California businesses have been able to operate for years as LLC’s.
Previously, contractors could only be California corporations as a vehicle to limit their personal liability. Operation as a corporation requires compliance with corporate formalities not required of LLC’s. The benefits of this change in the law is to simplify company operation procedures for contractors, and to decrease the likelihood that a contractor could have personal liability for the acts of your contracting business for failure to comply with complex corporate documents and procedures currently required of California corporations.
The CSLB will begin processing LLC applications no later than January 1, 2012.
The CSLB warns that contractors seeking to be LLC’s should not yet apply to transfer their licenses, because the CSLB is not issuing licenses to LLCs at this time.
The CSLB staff is currently developing new application procedures, creating applications, and putting in place important programming changes that are necessary for this new program.
The CSLB anticipates that it will be ready to begin accepting applications from LLC applicants late in 2011. Until the program is in place CSLB cannot accept applications from LLC’s and no LLC licenses will be issued.
The CSLB advises that you get future information on this issue by signing up to receive CSLB E-Mail alerts. Be sure to sign up for "Industry Bulletin" or "All of the above." Updates will also be posted at the CSLB website, which is www.cslb.ca.gov.
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Jonathan J. Sweet, LAW OFFICES OF JONATHAN J. SWEET, can be reached at 15951 Los Gatos Blvd., Suite 14, Los Gatos, CA 95032, (408) 356-0317, or (408) 482-7144, or email at jonathansweetlaw@comcast.net.