Alien Contractors, Corporate Licensing & Update on Bond Limits

Seen any ‘alien’ contractors? The truth is out there somewhere as our first contractor helps us learn. A new direction has a corporate contractor seeking to take one step back, before moving forward into the future just in case…

Q:  When the CSLB approves licensure for an individual have they also determined that the person is not an illegal alien?  The reason that I’m asking is a company that we may work with is asking us to represent and warrant that our independent contractors are not illegal aliens.  Therefore, we thought that if the CSLB licensure process confirm legal residency that we wouldn’t have to worry about that (at least for our licensed contractors).

A:  No, while the CSLB does require that you disclose your Social Security Number or Individual Taxpayer Identification Number, they do not verify if the applicant is an illegal US resident.

Q:  I’ve been a California “B” (General Building) Contractor for the past 11 years, or rather, I have been the Qualifier for my corporation.  I recently took a full time position working for a business that utilizes my trades skills but I don’t require a license.  I am closing the corporation by the end of this year to avoid paying future state corporate fees, income tax fees, etc.  From what I can tell, this will also terminate my connection with the corporate license.  While my new position is going well, I want to keep an active license ‘just in case’ or if side work pops up.  Do I have to reapply for a new license?  How long do I have before having to go through the full requalification process?  I am thinking a ‘sole proprietor’ would be the least expensive, lowest maintenance license to maintain with just a bond requirement.

A:  Congratulations on your new position!  You are correct that once you dissolve the corporation, you are unable to contract with that corporate license.  Since you are closing the corporation, yes, you would need to re-apply for a new license.  Keep in mind that you have five years from the time you Disassociate from one license to apply for another without needing to re-test.  If you don’t intend on using the license and only keeping it ‘just in case’, you may want to obtain a Sole Proprietor license and request it be issued inactive.  In that case you wouldn’t even need to obtain a Bond.  Inactive CA Contractor’s Licenses do not require a Bond or insurance requirements.  Good luck on your new venture!

Important Contractor Update!

On January 1, 2016, bond amounts for Contractor’s Bonds are increasing from $12,500 to $15,000.  Make sure you get your new Bond or cash deposit in place before the first of the year or you run the risk of license suspension!

Bonds for Qualifying Individuals who own less than 10% will remain at $12,500.