RMO/RME, Generals, Partnerships

Okay, a corporation, a partnership and a duck walk into a bar. The duck isn’t part of the story, but the two contractor’s questions begin a complicated journey to a complex answer. Remember it’s not the destination that teaches us the most it’s the journey…

Q: We have a partnership consisting of two corporations. One corporation is 100% owned by a Service Disabled Veteran with a current California contractor’s license. That company is the majority owner of the Partnership. We intend on applying for an “A” and “B” license.

Do the Qualifiers apply as Responsible Managing Employees (RME) or Responsible Managing Officers (RMO)? The CEO of one corporate partner will qualify for the “A” license. The President of the other corp. will qualify the “B”. Will the CSLB accept an application as a partnership listing both corporations as “individuals?” The application form clearly depicts the partners as individuals. What is proper way to proceed?

A: The CSLB will accept a license application for a partnership of corporations. Both general partners must be registered in good standing with the Secretary of State. You cannot list the entities as “individuals” and it is not acceptable to simply have a Qualifier as part of each corporation. Each qualifier will either need to be designated as a RME or qualifying partner (you CANNOT use the RMO designation on a partnership license).

As you’ve seen, the CSLB Original License Application does not lend itself to applying as you’ve suggested. Having handled many hundreds of General (GP) and Limited (LP) Partnerships, I can tell you that the paperwork requirements can be very complicated. Depending on the make-up of the partnership, you can end up needing to file several addendums with officers (for corporations); managing members for a LLC; or additional pages if one of the entities is also another LP.

I have discussed this fact with the CSLB on several occasions. I am sorry there is no easy answer, and suggested the Board devise a special application just for this type of entity. So far, no go.

Q: I have an “A” License and will be doing some solar installs. Could I use “Solar” in my business name? Say my business was Smith General Engineering could I use the acronym SGE Solar? Do I need to register this as a DBA? I would like to use my surname so I don’t have to register a fictitious business name.

A: In order to use the word “solar” in your business name, the CSLB will very likely require that you hold a “C-46” (solar) classification. I suggest that you apply for a name change, which is the only way of knowing for sure. If the CSLB does not accept your request, they’ll explain in writing why it’s not acceptable. Please be aware, that if you were to change the business name to say “SGE Solar”, you could no longer perform work as “Smith General Engineering”. To operate under both names, you need to apply for a second contractor’s license number. Please contact your local government regarding the requirements for filing a fictitious business name statement or DBA.

Q: You assisted us with getting our CA Contractor’s License. We wanted to apply as a LLC but had to settle for a corporate business structure. It looks like Senate Bill 392 has been passed and will be effective in 2011? Are we interpreting this correctly?

A: The information you have on SB 392 is out of date. This legislation allowing licensing of Limited Liability Companies (LLC) did pass the Senate but has not yet passed the State Assembly. According to the CSLB’s Legislative Liaison, should this pass and be signed by the Governor, it would not take effect until January 2012, at the earliest.