Taking a Partner

Life is often about changes. For our lives and our businesses. To paraphrase John Lennon, ‘life happens to you while you’re making plans’. Imagine these changes. Have you ever thought of taking a partner into your business? How would it work? Don’t you think the qualifier on your license would like to retire one day? If something happened in your earlier life that might affect your future plans?..

Q: I have read some of your past columns and found them very informative. Here is a question that I could not find a specific answer to. I’ve held a contractor’s license since 1997 and would like to add a General Partner. I would be the Qualifying Partner owning a majority of the business. I realize I need to fill out an application for an original license and pay $400 for the application fee. My questions: 1) would there be a problem with the General Partner only owning a small portion of the business (say 10%or less)? 2) Do I need to fill out the Cert of experience page since I’m a licensed contractor? 3) Would I need to retake the exam?

A: Thank you for your email. It would not be a problem if the GP owned 10% of the business. In fact, from my experience, the GP could own as little as 1% and this would be acceptable to the Contractors Board.

You’re correct; a new original license application must be completed. You must also post a new $12,500 bond and (if applicable) Worker’s Compensation certificate. The CSLB will issue you a new license number for the partnership. There is no need to complete the Certificate of Experience page or retake the exam. For your information, by definition the “Qualifying” Partner (QP) is also a “General” Partner.

Q: Our current contractor’s license is in the name of the President of our company. He is nearing retirement and I wanted to know: 1) Can his existing contractors license be transferred over to one of the other company officers? 2) Would this officer have to apply for his own new license first? 3) Is testing required? Thank you in advance for your expert advice.

A: As we discussed, the license belongs to the corporation, not individually to the company President. With him nearing retirement, one of the officers can apply to replace him as Responsible Managing Officer (RMO). This officer will NOT need to apply for his own license first. In fact, the only way to secure a waiver of the license exams, is for the qualifier to replace the President on this existing license.

As reported at a recent CSLB Licensing Committee meeting, the Board has received nearly 111,000 transmittals from Department Of Justice related to their Fingerprinting program. A surprising 15.3% (about 17,000) had a report of some criminal conviction in their past (either from the DOJ or FBI). To date, the Board has denied 660 applications based primarily on this information. All individuals listed on original, replacement, additional class, or home improvement salesperson applications are required to submit fingerprints as part of the licensing requirements. This also applies to applications to report new corporate officers.

Outgoing Board Member Paul Baldacci, requested that the CSLB investigate adding a requirement that all active contractors carry General Liability Insurance as a condition of licensure. The Committee took this under advisement and may discuss the topic at future meetings as part of the Board’s long-term Strategic Plan.