Contractors Bonds: New California Contractors Licenses

Some people are going ‘old school’ and giving up their PDA’s for pencils and paper. It’s just easier to write it down, rather than spend time pecking notes into a tiny keyboard. While you can find almost anything online these days, it still makes sense to also have some information in a more convenient form. For contractors who need a quick answer on a license question a handy reference on the bookshelf is a good idea.

The last copies of my book, “What Every Contractor Should Know”, are now available at a special price for readers. While some questions require more discussion, many solutions are just a page away. Readers who call me directly before December 31st will receive an autographed copy of my book at a special discount while they last…

Q: Thank you for speaking with me the other day regarding my contractor’s bond. I want to make sure I understand the main point of our discussion. Our bond expired on November 15, 2007 and the new bond will likely be filed during the first week of December. Can the effective date of the new bond be the same day the other bond expired?

A: Yes, the CSLB will backdate the effective ‘date’ so long as the bond is filed within 90 days of the prior bond expiration (i.e. in this case on or about February 14, 2008). This is important since the current suspension will be removed retroactively and should not appear on the company’s permanent record.

Q: Can a problem with someone’s sole owner license impact an unrelated corporate license? What if the sole owner is not the Responsible Managing Officer (RMO) on the second license?

A: If someone qualifies two licenses, there is automatically some connection between the entities – especially if a problem develops. If your RMO has an unresolved problem on another license, which leads to a suspension or judgment, this would likely impact all licenses he is listed on — regardless if the person is the qualifying individual. If the person will not clear up the issue on his sole owner license, you may want to consider removing him as your RMO.

Q: I currently have a sole proprietorship business with an “A” license with additional classifications. I will be incorporating soon with a partner who also has his “A” license, and additional classifications that are different from mine. We were looking at 50/50 ownership. Can we use one of these license numbers for the corporation and whose number should we use? Thanks.

A: Since you will both own 50% of the corporation, the CSLB will not allow you to use one of your licenses for this new company. The corporation will be issued a new license number. A sole owner has the option of transferring his or her license to a new corp. only if ownership is 51% or more.

It’s up to both of you, regarding who should be the qualifier for the “A” classification. It will not matter to the CSLB who is listed as RMO for general engineering.