Selling a License, Corporate Names & RMO Shares

There is a price to pay when a consumer asks the Board to help find a contractor with a particular trade. We take ‘stock’ of the situation confronting a Responsible Managing Officer and help a family chart a course for the future in selling their contracting business…

 

Q: Do I have to own any shares in a Corporation as RMO in order to qualify for a license?

 

A: There is no requirement that a RMO own any shares of the corporation.  This being said, an existing contractor should notify the CSLB regarding any change in ownership. Owning less than 10% of corporate stock will require the company to post a $12,500 Bond of Qualifying Individual.  If applying for a new license, this ‘ownership’ question is asked on the application.  Please contact us if you have further questions.

 

 

Q: Can you provide me with a list of plumbers in my area?

A:  While we don’t have that information readily available, the CSLB will provide you with a list of specific contractors based on certain criteria.  The form allows you to pick parameters such as classification, business type, county, etc. There is a $245 fee for this service.   The form can be found on the CSLB web site.

 

 

Q: It’s been a long time… hope you are doing well.  We are surviving…actually more than surviving.  Our landscape business, which had been very slow the past two years, is picking up now. In fact we are thinking of re-tooling for a final push to sell it before I retire…  that is the nature of my inquiry.

 

Can I change the name of a corporate license?  I think having my name as the business name may limit our possibilities to expand and ultimately sell the whole business to a non-family member.  My boys are in completely different fields and really don’t want to carry on with this business.   Or perhaps we do a DBA with a different name?  Got any ideas?  Thanks.

 

A:  Nice to hear that things are going well.  Have you decided how you’re going to sell the business — asset or stock sale?  If an asset sale, the buyer will likely set up their own corporation; purchase the assets, and continue operating as you have been doing for years. The buyer may want to keep your existing name or change it.  Either way, it should not matter what official name you’re using at the time of sale.

With a stock sale, again, the buyer can continue using your existing business name or amend it.  You certainly could add a dba, however, I’m not sure it would make a big difference since the buyer will be looking at your profitability and other financial considerations.  They may even want to maintain the existing name because it is known in the community.

We recommend that you contact a professional business broker or your legal council.  Discuss these questions with him or her, including the issue of the business name.  We can give you a few referrals in your area if you like.  Again, thank you for your email.  Good luck as you move forward with the sale.

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