By Shauna Krause, President, Capitol Services
Getting from buyer to owner in multiple licensed states might require a little SOS help to arrive as expected. Another contractor wants to use a long arm to pick up electrical work, and our final question really answers itself with a confidence booster…
Q: We are purchasing a company who holds a contractor’s license in CA, NV, and AZ. The entity is a corporation. We will be forming a new Limited Liability Company (LLC) to purchase the corporation, and the LLC will be the licensed entity. I’m familiar with the license transfer rules in CA, and we plan to transfer the corporate license number to the newly formed LLC. Do NV and AZ allow license numbers to be transferred, or will we be required to obtain a new license number?
A: NV and AZ allow you to keep the same license number if the corporation is converted into the LLC at the Secretary of State level. If there is no conversion, and it’s just a straight up new LLC, you will be required to obtain new license numbers.
Q: We are considering adding a “C-10” (Electrical) classification to our license. We have a WA based electrician who works for us. Would he be a good candidate to qualify for the “C-10” in CA, or should the individual reside in CA? If we can utilize his experience to obtain the Electrical class, can we start contracting for work as soon as he passes the CSLB exams, or do we need to wait the 8-10 weeks it takes after the testing for the CSLB to officially add it to our license?
A: The Qualifying Individual is not required to reside in CA in order to act as your Responsible Managing Employee (RME)/Responsible Managing Officer (RMO), however they are required to be actively involved in the CA contracting activities and oversee and supervise electrical work being performed. Therefore, if you decide to have him qualify the “C-10” classification on your license, you should plan for him to travel to CA on a regular basis to ensure jobs are running smoothly and all individuals performing electrical work under his “C-10” are certified through the DIR.
You cannot officially begin doing electrical work until the “C-10” has officially been added to the license, but it doesn’t usually take 6-8 weeks after testing. It could happen much quicker than that. Let me know if you’d like our assistance with the process.
Q: Our company currently holds a GC license and we want to be able to sub-contract work to one of our subsidiaries. We have an RME on our current license, and I understand he is permitted to be an RME on a second license as long as one licensee directly owns at least 20% of the other licensee. However, I also understand the RME would need to certify that he works at least 32 hours a week for both companies, which isn’t accurate. If we were to make him an RMO instead, that certification would not be required, correct?
A: That is correct. RMO’s do not have an hour requirement. Please note RMO’s are still required to be actively involved in both entities business operations and oversee/supervise work for both entities. It makes me happy to confirm your understanding was right on!
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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