ILOC & LLC, AZ Solar and Experience Credit

Paperless office? Not on Earth! Keeping documentation to prove a point is often required. As our first aspiring contractor will learn having a ‘paper trail’ is an issue that may make or break his dream of getting licensed. We help clear the air obscuring an opportunity for solar work across the border before sharing a tip on reducing costs in becoming an LLC in California…

 Q:  I called the Contractors Board and was told that I might not be able to get a license since I was paid “under the table”.  Is this true?  I have the required four years experience.


A: The person at CSLB likely told you that a random percentage of applications are sent out for investigation.   All applications are evaluated to determine if the applicant has the required years of experience.  However, in determining if an application is sent out for a more formal investigation, the Board may look at a number of factors including your age; how many years experience you have; and whether your background is self-employed or as owner-builder.  Also, a small percentage of applicants are selected totally at random.


If for any reason your application is flagged, you’ll likely be asked to provide proof of your contracting background beyond the required Certification of Work Experience.  This ‘trail’ of proof can be through pay-stubs, tax returns, or other means showing how much you were paid and for how long.  If you were paid “under the table” it may be difficult to produce documentation showing that in fact you performed the work you claim.


Q:  My Company does solar electrical work.  We are based in California and we have a “B” General Building license here.   We are interested in doing the same type of work in Arizona but are unsure what the proper classification would be.  Is it the same as California? Can we do solar work with a General Building license?


A:  There are several classifications in Arizona that allow you to do solar work, unfortunately I have to tell you the General Building license is not one of them.  For solar electrical you would be required to obtain an “L-11” Commercial Electrical, a “C-11” Residential Electrical, or a “K-11” Dual Electrical classification. Fortunately, we have assisted contractors with Arizona licensing for many year and if you’d like our assistance with this process give us a call.


Q: I am in the process of obtaining a Contractors License for my Limited Liability Company (LLC).  As you probably know, an additional bond is needed for a CA LLC in the amount of $100,000.  My bonding company is asking that we get an Irrevocable Letter of Credit in order to obtain this bond.  Is this standard?


A: According to the bonding company resource we consulted, the Irrevocable Letter of Credit (ILOC) is an option for an LLC that may not want to be submitted for credit consideration.  It is also a way to reduce the fee for the bond.  From what we’ve heard from many of our LLC applicants, the LLC/Worker bond has a minimum premium of $5000, so if you are able to secure an ILOC then that fee is greatly reduced.  You can apply for an ILOC with your bank, but please note that the bank must first be approved through the bonding company. Tax or other legal issues aren’t addressed here so a call to your tax advisor is always a good thought in making important business decisions.