License Expiration, Corporate Assignment & Family Waiver

Deadlines are called that because after that set day or time, it’s over. No further discussion, done deal. For contractors, government rules and deadlines for paperwork are serious. To paraphrase Donald Trump, ‘everyone deserves a second chance’ may be a nice idea, but government means business when they require you to follow the rules or face the consequences …

Q: I was the Responsible Managing Officer (RMO) on a license (“B”) that expired. The CSLB told me that I could be issued a new personal license with the same Class “B” without any tests as long as it was within 5 years. Is this true and is it possible this could change if I wait?

A: You got the right information from the Contractors State License Board. They were referring to B&P Code 7141 which states in part, “…a license that has expired may be renewed at any time within five years after its expiration date by filing an application for renewal…” I do not believe this law will be changed; however, if you wait beyond the five years — EVEN BY ONE DAY — you will be required to file a new application for original license and retake the applicable state exams.

Q: We have a client who has an individual contractor’s license and wanted to use it with a corporation (which he owns 100%). I understand there is a simple form by which a sole proprietor can have their license re-issued to a corporation. What happens if he changes his mind down the road?

A: When dealing with the CSLB, or for that matter any state government agency, nothing is ever simple.

When an individual applies for a corporate license — and owns at least 51% of the company — the CSLB requires that the applicant complete the form “Licensed Sole Owner Applying For Corporation”. This asks the contractor to check the box marked “YES – Reissue my sole owner license number” or “NO – DO NOT reissue my sole ownership license number … Please issue a new license number to the corporation”. If the sole owner elects to have his license number reassigned, it will forever be tied to the new corporation.

Q: My father is currently the owner of the company and wants to know how we would go about making me the Responsible Managing Officer (RMO) so that if anything happened to him, I could stand in and the company would continue to operate without penalties. One of your past columns indicated that because I am his son I would not have to take the contractor’s license test. Can you help?

A: I am glad you were able to find this information. Most of my past columns are posted at www.cutredtape.com for people to review and search by topic.

What you heard is partially correct. B&P Section 7065.1 (b) does allow for the transfer of an INDIVIDUAL (sole owner) contractors license from father to son — with a waiver of the law and trade exam — in case of the absence or death of the licensee. However, since your father qualifies a corporation, the license belongs to the company, not your father as an individual.

B&P Section 7065.1(c)) would still apply to your situation in that it allows for the replacement of the existing qualifier on a CORPORATE license even if the person is not a close relative. In both instances, the new qualifier must have worked for this company (or individual) in a supervisory capacity for 5 of the past 7 years in the same classification(s) presently held by the licensee. Note, a waiver can be applied for but is not automatic.

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