Our first contractor is 99% sure he knows the answer. We’re here to give him the assurance he needs in providing our answer as we do 100% of the time! New business poses new problems for an aspiring California entrepreneur…
Q: I think I know the answer to this question, but I thought I’d better check with the expert! Contractor’s licenses in AZ, NV, and CA are not transferable, correct? We are in the process of selling the assets of a business and I’m trying to determine if the licenses would transfer. This is not a stock transaction where the license holder would be the same and just the owners would change. We will retain the entity that holds the license (but essentially there would be no assets so it wouldn’t be operating) and the purchasers would be forming their own company to conduct business. I’m assuming the new entities would have to file for their own licenses? And as always, thank you for your help!
A: As always, thank you for your question! You are correct, in an asset sale since a new entity is being formed, the new company would need to apply for a new contractor’s license and they would be issued a new license number in all those states. Let us know if you’d like our assistance with that process in CA, NV or AZ.
Q: We are starting a new business in CA and we want to provide contracting services to homeowners such as HVAC, plumbing, pool and spa repair, handyman work, electrical, etc. We won’t be self-performing any of the work, we are just acting as a “one-stop shop” for homeowners to call for their home improvement needs. Will the General Building (“B”) classification be sufficient for our company, or will we be required to have an employee sit each “C” specialty classification?
A: As long as you won’t be self-performing the work, the General Building classification appears to be sufficient. According to the Business and Professions Code 7057(b) “a general building contractor shall not take a prime contract for any project involving trades other than framing or carpentry unless the prime contract requires at least two unrelated building trades or crafts other than framing or carpentry, or unless the general building contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor to perform the work.”
Q: I am an out-of-state contractor and we currently have a license in CA for our corporation but haven’t been getting much work lately. Our qualifying individual has informed us that he is disassociating from the license and we have 90 days to replace him. Can we just go without a Qualifier since we aren’t really using the license?
A: You do in fact have 90 days to replace your Qualifier once he/she disassociates from your license. After the 90 days your license will be Suspended. If your intent is not to use the license, we recommend you file as Inactive. In this way you don’t need to have a Qualifying individual, bond, or Worker’s Comp Insurance (as long as there are no employees).