LLC Contractor Licensing, Corporate Licenses and Business Names

Having many years experience assisting contractors, it’s always a pleasure to hear from them again. In this particular case, my answer will likely be of interest to an unlimited number of contractors. Another contractor knows that the company name you’re using has a direct impact on what kind of business comes through the door…

Q: I have worked with you several times applying for our Contractors Licenses. Our parent firm is a Limited Liability Company (LLC), which does business in Arizona, Nevada and other states. Our corporation was created solely for the purpose of contracting in California. With the change in California that will soon allow LLC’s to hold Contractor’s Licenses we’re wondering whether there might be a provision for an entity like our corporation to transfer its licenses to its Parent Limited Liability Company? I would be interested in any information you might have regarding the upcoming change in California.

A: Thank you for your email and past use of our firm. I have written a letter, which I recently sent to a number of my clients (and others) who have expressed interest in securing a LLC license. This summarizes where the CSLB is at and when we expect the Board to allow LLC licenses to move forward (likely around January 1st). I have added your name to this list for future updates.

It does appear the CA Contractors Board will consider allowing a corporation to transfer its existing corporate license to the new LLC entity. However, there are a few restrictions so not every company will be able to take advantage of this provision.

Any reader interested in receiving a periodic LLC update, should contact my office by phone, fax or email.

Q: Hello, rather than trying to get someone on the phone at CSLB, which is nearly impossible…I was hoping you might be able to help. We are looking to incorporate our Sole Owner construction business. We currently carry a “B” license and 2 specialty classes. Can the corporation have one name and the other 2 companies operate under different names but the same license number (i.e. XYZ Construction Inc.; XYZ Painting, XYZ Plumbing) or is there only ONE name allowed per license number? We only have “construction” in our name and feel it deters people who think we may not be legit painters or plumbers (even though we are!).

A: Thank you for the email inquiry. You have the option of incorporating and doing business under various names. Using your example, this means you’d end up with 3 licenses, each with a different name and number.

Coordinating these can be tricky due to a recent change in CSLB policy. For example, you may want to first secure a new license number for XYZ Construction Inc. or have your Sole Owner license transferred to the corporation. Once this is completed, the two other original license applications can be filed (for XYZ Painting, XYZ Plumbing). To reiterate, each business name must have it’s own license number.

Q: I would like to reactivate my corporate license and keep my personal license on ice. Can I do this? I remember a time when it was required that your personal license be active to qualify a corporate license.

A: I am not aware of any time in the last 30 years (which is as far back as my direct knowledge goes) where it was a requirement to have both licenses active. This being said, it is up to you, as the contractor, to make a personal decision on whether you want to reactivate one or both licenses. If you are unsure of the consequences, let’s talk further.

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