Foreign vs CA LLC, Business Names, LLC Liability Insurance Requirement

A ‘suspense’ thriller has a happy ending for this Limited Liability Company (LLC) that begins our contractor Q&A. We save time and money for a ‘General’ whose plan was defeated by a single word. Our final Q&A helps plot the route for another LLC seeking a ‘foreign’ designation for their company…

Q:  Our LLC license is currently suspended.  The CSLB’s website states that the suspension is due to the General Liability insurance being expired.  We recently submitted a new insurance certificate to update both the Worker’s Comp insurance and the Liability coverage.  Can you tell why they updated the workers comp insurance and not the liability?

A:  I spoke with someone at the CSLB and it appears they just missed the Liability portion of the Certificate.  As you are probably aware, the CSLB only requires proof of liability insurance for LLC’s and not other types of entities, so it is sometimes missed.  Your license has been updated and is now current and active.

Q:  We recently applied for a license for our partnership, which is called ‘X & Y’ Construction.  The initials stand for our names (which have been changed to protect the innocent!).  We saw on the CSLB’s pending application website that the application was rejected because “name is not compatible with the General Engineering classification”.  Does that mean we have to re-apply and start over?


A:  No, it does mean that you need to re-apply and start over.  It just means that you need to make a correction to your business name.  Unless you put a descriptive term that relates to your specific trade, only General Building licensees may use the word “Construction” by itself.  For example, you could change your name to ‘X & Y’ Engineering Construction, as one option.


Q:  Your company frequently files documents for us at the CA Secretary of State.  We have a domestic CA corporation that we want to convert to a foreign LLC, both entities are currently registered with the Secretary of State.  Do you know what the process is to accomplish this? We appreciate your service and know you can likely help us now.


A:  Thanks. A California corporation cannot convert or merge in to a foreign LLC directly.  So the process would entail converting the California corporation in to a California LLC, and then at that point you can convert that “new” LLC in to the foreign LLC.  We can of course file these documents for you so contact us if you’d like assistance. 


CSLB Registrar Sands to Retire

Steve Sands, who’s been at the helm of the Contractor’s Board (CSLB) since 2001 has announced his plan to retire at the end of the year and the process of selecting the next Registrar of Contractors is underway in Sacramento. Under Mr. Sands’ leadership, CSLB has been recognized as a leader in proactive enforcement programs and partnerships with state and local agencies that help curb the underground economy. CSLB’s Licensing, Examination, Enforcement, and Public Affairs programs have been used as models for the National Association of State Contractors Licensing Agencies (NASCLA) and other agencies within the Department of Consumer Affairs. We wish him the best!