New California Contractors License

With a slower economy many contractors are calling me to look into new ways to create jobs and profit. For many having a license is just the starting point in building their business. How can you realize more bid opportunities? Another contractor gets ‘linked’ to an answer, while a consultant with ‘designs’ on advising builders gets nowhere fast . . .

Q: I very much enjoy reading your column. I am a small General Engineering & Building Contractor. I would like to start two additional businesses with two different partners. The first would have street repairs/paving as its main scope of work. The second business involves the installation of solar panels. The first partner is not a Contractor. My second partner has a “C” license. How do I set up this business structure? Would the setup be different for each company? Would I be able to have a new ‘dba’ (doing business as) with each?

A: As long as you’re the qualifying individual owning at least 20%, you can qualify up to 3 licenses (not counting your current sole owner license). Since a “B” can properly do solar installations, it appears you have the proper classifications to handle this work. Therefore, it should not matter whether either partner is a Contractor.

You can set up these businesses in several ways. For instance you could form two new corporations, each with different officers and a different classification. Or you could establish one new company with the same officers and have a different ‘dba’ for each. A third option would be to form two partnerships with you as the qualifying partner. Since there are so many business structure combinations, I would suggest also contacting a legal or tax specialist before moving forward.

Q: Thank you for answering my question a few weeks ago. I have another question for you. As an individual, or even an LLC, acting as a “consultant” would I be required to have a business license in CA? I’m assuming they do require one. For example, I have a LLC and I’m considering offering consulting services to clients who are seeking Design / Build for their project. Please advise.

A: Acting as a ‘consultant’ or construction manager can be tricky since often the company is in effect acting in the capacity of a contractor. Whether a license is needed will depend on the contract you sign with the owner. If it calls for any “building” or “installation” (i.e. any construction), a license would be required — even if your intent were to sub-contract 100% of the project. As we discussed, the CSLB will not issue a license to a LLC.

Q: In regards to becoming a California Contractor, I had spoken with someone at the State, and was told that electricians do not need a card to work there. However one of our project managers came in this morning and said he had talked to an Oregon Contractor licensed in California, who told him that his guys had to take a test in order to work as an electrician in your state. Do you happen to know?

A: To work as a “C-10” (electrical) contractor you are required to hold a CA contractor’s license. If you employ electricians, they must each be certified to work in CA. Contractor licensing is handled through the Contractors Board while this certification is handled through the Division of Apprenticeship Standards – Electrician certification program (part of the Dept of Industrial Relations). For a link to more detailed information visit my web site, and click on the “Resources” page.