Contractor License Questions: Sharing contractor’s licenses and responsible managing employees

Can you be a Responsible Managing Employee in California while living in another state? One contractor needs to know and we all learn from the answer. Another contractor with an individual license is qualifying a corporate license. Can he still do business as a sole proprietor too? Finally, can a contractor share his license with his wife?. . .

Q. I contacted you a few months ago regarding renewing our CSLB license. We now have a new set of officers to put on the license but our RME will shortly be leaving the company, which leaves us with a problem. We do not currently have any staff left in your State.

Are there any consultants in California that act as Responsible Managing Employee (RME) on a professional basis that we can hire? How feasible is it for someone based in our home state to come and take the qualifying exam and act as the RME?

A. Regarding your question…. You may wish to advertise in a professional journal or newspaper that you’re looking for a superintendent that is also licensed in CA. I personally do not know of anyone in that position.

There is no regulation concerning having an RME that is based in another state as long as this person is a “Bona Fide” employee (not a consultant); works at least 32 hours a week for your company and is involved with the day-to-day operations on projects in CA. This does not mean he must be on-site all the time but ideally he should be involved with the work in some supervisory capacity. I will fax you a copy of CSLB rule 823, which addresses this issue.

Because your license has been in existence 6 years, there is a possibility one of your current supervisory employees could qualify to become your new RME with no testing.

Q. I will soon become the qualifying individual on a new corporate license and will own approximately 10% of the company. Can I still keep my personal license active? What bonding will the Contractors Board require?

A. To keep your present license active would require that you own at least 20% of the company stock. On the other hand, owning (at least) 10% means you will NOT be required to post a $7500 Bond of Qualifying Individual. The Board will still require a $10,000 Contractors Bond (or cash deposit) as they do for all active licenses.

Q. My wife has been working in my (sole proprietor) painting & wall covering company for a number of years. She has been responsible for the wallpaper installation and much of the estimating. I would like her to ‘share,’ the license if that’s possible. How would she go about this?

A. You can’t “share” a sole proprietor license. However, you would be able to add your wife to this license if she qualified a different classification. For example, there is a “C-61″/”D-29” classification for “Paperhanging.” Although this is covered by your “C-33,” you could apply for an additional class with her as a RME. An alternative would be to form a partnership or corporation and apply for a new license with both of you listed as partners or officers respectively.

Knowledge is power and knowing where to go for the answers is half the battle.