By Shauna Krause, President, Capitol Services, Inc.
What we ‘know’ and what’s actually ‘correct’ don’t always jibe and for contractors that can be a problem. It’s why we answer questions here and have assisted contractors in Sacramento for more than 30 years in negotiating these complex rules. Have we not all ‘assumed’ something that turned out different then we believed it would? Here’s a couple of recent ‘real world’ examples…
Q: We recently purchased a fencing company and the previous owner is going to remain working for us, however he will no longer be an Officer. What is the proper form that we use to change him from an RMO (Responsible Managing Officer) to an RME (Responsible Managing Employee)? I assume we can just take over the license and add our officers to the CSLB’s records.
A: Not necessarily! It all depends on whether the sale was a “stock” sale or an “asset” sale. If the purchase was a stock sale, you can keep the same license and make the necessary changes to the license. If the purchase was an asset sale, you will be required to form a new entity and obtain a new Contractor’s License. Contact our office and we can provide you with the appropriate forms based on the conditions of the sale.
Q: You helped us obtain a contractor’s license a couple years ago and we have a new entity that we’ve formed. In doing a little research, our RME will not be able to Qualify both licenses because there is no common ownership. Is it possible to have two entities operate under the same license?
A: No, two separate entities cannot operate under the same license. Your new entity will need to obtain its own license to bid or do contracting work.
Q: We are a Texas-based company and we provide hydro-excavation services, which is the process of using high pressure streams of water or air to break up ground and excavate, while using a high air flow vacuum that sucks up the soil, debris, dirt, rock, etc., in order to allow a visual observation of the buried underground utilities or infrastructure. We need to obtain a Contractor’s license for this work in California. Is there a particular type of contractor’s license needed for hydro-excavation, or will any type of license do? We have an employee with an inactive “B” General Building license.
A: Thank you for contacting Capitol Services Inc. The “C-12” (Earthwork and Paving) would be the appropriate license for hydro-excavation work. However, if you are doing any utility-related work you would need to obtain an “A” (General Engineering) license. A “B” General Building license would not be appropriate for this type of work.
Q: I am a California contractor and I am going to apply for a Nevada license using reciprocity. My agent told me that I’m required to have a Nevada address. Is a PO Box sufficient? I don’t want to have to open an office there.
A: That’s actually not entirely correct. You are required to have a Registered Agent in Nevada to accept court documents on your behalf if needed, but there are many companies that are in business to serve as your Registered Agent for a yearly fee. Capitol Services provides that service here in California and you can contact our office if you need a recommendation for a company in Nevada.
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., 1225 8th St. Ste. 500, Sacramento, CA 95814. Research past columns at www.cutredtape.com.