By Shauna Krause, President, Capitol Services, Inc.
No matter the form, alphabet title or ownership, contractor licensing ultimately all comes back to you! Another licensed contracting concern may or may not be qualified for renewal, here’s why. I finish by ‘breaking the code’ for a rejected contractor…
Q: I have a Sole Proprietorship license. My new partner and I formed a Limited Liability Company (LLC) that we would like to put my license under. This is going to sound confusing but we set up the LLC so that it is owned 50/50 by each of our own LLC’s, which we each own 100% of. Is it possible to have my LLC be listed as the Responsible Managing Member on the new license? I’m just wondering if there is any way to have the new license not associated with an individual.
A: No, a company cannot be the Qualifying Individual. The RMO/RME/RMM/RMG is required to be an individual. But you can still list your two LLC’s as Members on the license.
Q: Our company currently has an Inactive CA contractor’s license. We do not have a Qualifying Individual associated with it because we aren’t currently using it but we want to keep it just in case something comes up. It’s up for renewal at the end of the month and I saw on the CSLB’s website that you can now renew your license online. I followed the link, put in the license number, and it said that I cannot renew the license without replacing the Qualifying Individual. Is this a new rule that you need to have a RMO/RME associated with the license to keep it on Inactive status?
A: The CSLB still allows you to have an Inactive contractor’s license without an RMO/RME associated. You just are unable to complete the renewal online without an active qualifying individual. You should have received, or will be receiving very soon, the paper renewal by mail from the CSLB. You can have any Officer currently listed on the license sign the renewal, pay the inactive fee, and mail it back to the CSLB.
Q: We submitted our license renewal to the CSLB prior to it’s expiration date and it was rejected and returned with a letter stating we needed to add our “top three workers’ compensation classification codes” on the form and return it. I have no idea what that means, can you help? Does this mean our license is going to go on record as being expired for a period of time?
A: Yes, this is a new CSLB policy and it has resulted in lots of renewal rejections. They now require that you list the top three workers compensation classification codes for which the highest estimated payroll is reported on the policy. Contact your insurance company, they can give you the information. And not to worry, as long as you return the form with the codes to the CSLB within 30 days of the notice of denial, the license will be renewed retroactively.
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