A Sole Owner shares a lesson on changing company structure that requires a sacrifice. Another interesting question from a General making entry into CA construction while another helps us remember when to ask for a waiver…
Q: We have been licensed for many years in California as a corporation. Now that California is licensing Limited Liability Companies (LLC) we recently applied for a license for our LLC, which is how we conduct business in many other States. We are General Engineering contractors and our business name is our owner’s name, followed by “Construction LLC”. Our application was rejected because the CSLB is stating that we cannot use the word “Construction” in our name. They are requiring that we adopt a ‘doing business as’ name (dba). For obvious reasons we don’t want a different name in California than we have in other States and the President is arguing that there must be some way around this. Is there a law that you can point me to that I can provide to our President with regards to contracting company companies using “Construction” in their business name?
A: There is no code section that specifically addresses the use of the word “Construction”. B & P Code Section 7059.1 states that a business name needs to be compatible with the classification that is being performed. The CSLB has determined that General Building (“B”) contractors are the ONLY license holders that can use “Construction” in a business name without giving descriptive or limiting words. Therefore, you can still use the word “Construction” in your name, but it needs to be prefaced with a descriptive word. As an example, “John Smith Engineering Construction LLC” would likely be acceptable.
Q: I am a General Building contractor and I want to add the “C-8” Concrete classification to my license. Is there any way that I can get a Waiver of the exam based on the fact that I’ve been doing concrete work with my General license for many years?
A: There are certain circumstances where you can ask for a Waiver of a Specialty Classification based on the current classification that you hold. The CSLB may consider a waiver if you meet the following requirements: a) The Qualifier has been listed as a member of the personnel for five of the last seven years immediately preceding the application; b) The Qualifier has at least four years of experience within the last 10 (Journeyman level or above) in the classification being applied for; and c) The classification being applied for, as determined by the Registrar, is closely related and is a significant component of the classification currently on the license.
Be aware that when requesting a Waiver of an additional classification you will likely be required to provide additional documentation, such as detailed project forms showing that your additional classification has been a significant part of your work.
Q: I have a Sole Owner license and I recently incorporated. Do I just need to submit a name change application to the CSLB?
A: No, since you formed a new corporate entity you are required to submit a new license (waiver) application. As long as you own at least 51% of the corporation you can transfer your Sole Owner license number to the corporation, however be aware that if you do that you can never get it back as a Sole Owner in the future.