License Transfers to LLC & Adding Classifications by Waiver

Contractors come in all sizes. Some work close to home while some contractors need licensing across the country. Several quality answers ‘qualify’ as expert assistance to contractors large and small. But first we begin with an important question on an LLC licensing…

Q: I have been approached by another company interested in purchasing 60% of my construction company to form a new Limited Liability Company (LLC).  I currently hold a license as a Sole Owner/ Proprietor.  Can my license be transferred to the new LLC if I will only have 40% ownership of the new company?

 

A: You can transfer your qualification to the new LLC license, however because you only own 40% you will not be able to transfer the license number.  The CSLB allows a Sole Owner to transfer their license number to an LLC only if the following conditions exist:

  • The Sole Ownership license is in good standing;
  • The LLC was formed by the same licensee as the Sole Ownership license;

AND

  • The licensee maintains ownership directly or indirectly of membership interests evidencing at least 51% of the voting power of the LLC.

This can be confusing, so call my office if any further clarification is needed.

 

Q:  We are a large company with licenses all over the country.  In several States we have listed more than one Qualifier per classification to try and avoid a situation where someone suddenly leaves and we have to scramble to replace them.  We are currently in the process of obtaining a California license and I have heard that CA does not allow for more than one Qualifying Party per classification.  Is that accurate?

A: Yes, that is accurate.  Often times large companies will have one (or several) of their employees obtain their own Inactive Sole Owner licenses as a sort of “back up” license.  That way if the company’s Qualifier leaves, in which case you would have 90 days to replace them, than one of the licensed employees can jump on the license right away without needing to go through testing and fingerprinting.

 

 Q:  Our Company currently has a “C-10” (Electrical) license however over the past several years we have strictly been doing low voltage work.  As I’m sure you’re aware, the “C-10” license requires that our employees obtain an Electrical Certification to perform any work.  If we wanted to obtain a separate “C-7” Low Voltage license to avoid the electrical certifications, would our Qualifying Individual need to take an exam, or would he be eligible for a waiver based on the fact that he passed the full electrical exam for our current license?

 

A: If your company is applying for a separate “C-7” license and your Qualifier has never held the license before then he will not qualify for a waiver of the trade exam.

Under certain circumstances, B&P Code section 7065.3 allows an individual to request a waiver of an exam when adding the classification to an existing license. To request this, you have to be able to show that the classification being added is closely related to the classification currently listed on the license.  Additionally, you will need to show that low voltage work has been a significant part of the work you have done with your “C-10”.  The CSLB will want to see that you have at least four years of experience within the last ten performing “C-7” work at a journeyman level or above.

Since your work is strictly low voltage, once you add that classification, you may want request to have the “C-10” classification removed from the license in order to avoid the need for electrical certifications for your employees.

 

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