Sole Owner to Corporate, Statute of Limitations on Judgements & More on Displaying License Numbers on Vehicles

Some things in life and contractor’s licensing require more time, money or explanation, some less and some can’t be ‘satisfied’ no matter how long you wait, explain or would be willing to spend. But, first there’s more…

We always appreciate the sharp eyes of readers, some of whom got in touch about the way company names and contractor license numbers must be displayed on vehicles. The key is how the vehicle is registered with the DMV.

While space limits our answers at times, this one does need further clarification, as the real practice by many may be out of synch with the actual letter of the law which spells out how and when names and license numbers are required:

 

“C-36” Plumbing, “C-45” Sign, and “C-57” Well-Drilling contractors must display the following information on each side of every business vehicle with commercial registration in letters at least 11⁄2 inches high (B&P Section 7029.5): Business name, permanent business address and contractor’s license number.  All other licensed contractors must display their business names and contractor license numbers on every one of their commercially registered vehicles. The name and number must be in a clearly visible location in letters at least 3⁄4 inch high and wide (B&P Section 7029.6).  For more visit: www.cslb.ca.gov/Resources/GuidesAndPamphlets/AdvertisingGuidelines.pdf

We are always interested in reader feedback and welcome any inquiry for additional information at Capitol Services.

 Q:  I had a judgment on my previous Sole Owner license but it is over 8 years old.  I recently applied for a new contractor’s license in the name of my corporation.  The application was denied based on the 8-year old judgment that is still “unsatisfied”.  It was my understanding that judgments go away after a period of 7 years.  Is that not true?

 

A:  It is our understanding that the CSLB has no statute of limitations for a judgment on a license.  The Superior Court of California does have a 10-year statute of limitations.  After 10 years, if the Superior Court does not renew the judgment, you can provide proof of non-renewal to the CSLB in order to have the judgment forgiven.

Q:  I currently have a Sole Proprietorship contractor’s license and I am in the process of incorporating.

I will submit a “Licensed Sole Owner Applying for Corporate License” form.  The current license is in good standing; and the corporation is formed by the individual licensee; and the Sole Owner licensee has at least 51% ownership of the new corporation.  I am aware that once the number is transferred, it belongs to the corporation and cannot be reissued to an individual at a later date.

 

My question is:  How are my contracts in progress affected by the change in business structure? For example, if the license is transferred to the corporation in January, and work covered under a contract signed with the Sole Proprietor entity is still in progress when the transfer occurs, are we still in compliance with being licensed at all times?

 

I appreciate any information, as I am not able to find it anywhere.

A:  If you will still have work in progress under the Sole Owner/Proprietorship license when the conversion takes place, while you will still be in compliance, you will want to also inform each of your customers that have work in progress that the change has taken place.  You should do this in writing and you can inform them that the license number, ownership, bonding company, Worker’s Comp, etc. remains the same, but that you have converted from a Sole Proprietorship to a Corporation.

Also just FYI, beyond the Sole Owner to Corporation form you will also need to complete and submit a waiver application.

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