NV Financial Requirement, Adding a Family Member & Waiver Consideration for Generals

Your son may be bright but how can you ‘incorporate’ him on your license?A ‘concrete’ result for a General’s inquiry will require greater details to be firmed up and a new Nevada venture will need to make a ‘statement’ to be successful…

Q:  My son has been working for me for years.  He’s not an Officer of the company.  Is there any way to add him to the license?

A:  There are only two capacities in which an individual can be listed on a corporate license: either as an Officer, or as the Qualifying Individual. So, the only way to add him to the license currently would be to replace you as the Qualifying Individual.  

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 mayconsider 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 am in the process of completing an application for a Nevada Contractor’s License. The application states that we need to provide a Financial Statement no more than a year old. Our fiscal year end is March 31st so the last audit that we had done was last year.  Our next audit will not be complete for another month, which is exactly when the bid date is for the project we are seeking in Nevada.  Will the Nevada Board accept our last financial statement if we provide a letter from our accountant stating that new one is not complete yet and explaining that March 31stis our fiscal year end?  If not, can I at least take the exam ahead of time?

A:  No, unfortunately Nevada will not budge on the requirement.  You absolutely have to provide a Financial Statement dated within the last year.  They will not approve you to take the exam prior to providing an acceptable financial statement.

Disassociation Timing, License Waivers and Registering Your DBA

Let’s ‘file’ the rough edges off a new rule on those ‘doing business as’ in California. Another contractor’s best laid plans crash when they get ‘waived’ off while another RME problem may have two ‘individual’ solutions pending the final test…

Q:  We are a sign installation company, but we are needing to get a General Contractor’s license in CA so we can be the prime contractor on our jobs.  Our business name is “ – – Signs”.  The CSLB rejected our application stating we need to register a ‘dba’ (doing business as) name because our company name is incompatible with our “B” classification.  What is involved in registering a ‘dba’ name?

A:  That sounds accurate!  While I’m not super familiar with registering ‘dba’ names since this is a new requirement the CSLB implemented, it is my understanding you file the fictitious name with the County Clerk where you intend on conducting business or nearest to your business address.  If you aren’t going to have a CA address, you can file the ‘dba’ with Sacramento county.  You then provide proof of the filing to the CSLB.

Q:  I obtained a Corporate license about 4 years ago using a Responsible Managing Employee (RME) who was not using his personal license, with the understanding that after five years of being licensed, I (as the only Officer of the company) would be able to replace my RME on the license and request a Waiver of the exams.  At my CPA’s recommendation, I formed a Limited Liability Company (LLC) last year to replace the Corporation.  I brought on a couple of partners, so we didn’t meet the requirement to transfer the license number because the personnel changed so we ended up with a new license number.  Between the two companies, it has now been five years and I’m ready to replace my RME.  Can you assist with that process and getting the approval for the Waiver?

A:   We can definitely assist with the replacement process, however, unfortunately you are not going to qualify for a Waiver of the exams.  In order to qualify, you have to have been an Officer/Member/Supervisory employee of the company for five out of the last seven years.  You cannot use two different entities combined(Corp/LLC) to add up to the five years and qualify for the Waiver.

Q:  Our current RME gave his notice that he will be leaving our company to start his own business, so we need to replace him on our license.  He has agreed to remain on the license until we replace him.  We have a couple other candidates in mind. Is the best way to proceed to have each individual obtain their own personal license, or should we just have one of them apply outright to replace the current RME?  I’m just wondering if filing the replacement application automatically starts the 90-day clock ticking.  We don’t want our license to lapse in the event our new person doesn’t pass the exam!

A:  Understandable!  Filing the replacement application does not automatically start the 90-day clock.  If your current Qualifier has agreed to stay on board until you replace him, there is a box you can check on the replacement application to not remove him/her until the new person is officially added to the license.

Social Security for Foreign Officers, Carpentry and LLC Business Name Transfers

Some electrical work is just ‘plug and play’ for a carpenter? A name change won’t work in another contractor’s company transformation that is turning into a ‘bad dream’ for him.  I also share why a ‘foreign’ officer will have to be ‘qualified’ to come ashore as a legal contractor…

Q:  Can a “C-6” (Cabinet, Millwork and Finish Carpentry) license install minor electrical components?  Basically, the lighting would be installed only on the cabinets the “C-6” contractor is putting in. The cabinets are manufactured by the C-6 company and the lighting going in is “plug and play” meaning that they are not hard wiring anything from an electrical panel within a building.  Instead, they will be plugging the light into a receptacle that was installed by a licensed electrician.  In some cases, if a client is requesting that the units be hard-wired, the C-6 company would simply request that the electrician wire the final connection from their light fixture to his junction box, switch, etc.  

A: Yes, it is acceptable for a “C-6” contractor to plug in the power cord for built-in cabinet lighting. The use of a “C-10” contractor to hard wire any lighting would be appropriate as well.

Q:  We are a flooring contractor and have both the “C-15” (Flooring) and the “C-54” (Tile) license.  We have been licensed since 1988 as a Corporation and we just recently formed a Limited Liability Company, so we need to transfer the license to the LLC.  

Our corporate business name is XYZ Design Inc., so naturally we applied for the new LLC as XYZ Design LLC.  Our application was rejected, asking for us to add a dba such as “XYZ Flooring Design”.  We have been XYZ Design Inc. for over 30 years, has something changed with moving from a Corporation to an LLC that is triggering this?  Our ultimate goal is to be known by our legal name.  “Changing our name” sounds like an administrative nightmare!

A: The CSLB has been “enforcing” B&P Code section 7059.1 more than ever before (at least in my experience), which states “A licensee shall not use any business name that indicates the licensee is qualified to perform work in classifications other than those issued for that license, or any business name that is incompatible with the type of business entity licensed.”  

They are rejecting business names for being “too vague”and have determined that words such as “Services”, “Systems”, or “Design” can only be used if they are in conjunction with your classification, hence the suggestion of “XYZ Flooring Design”.  This is fairly new, which is why your business name was acceptable when you originally obtained the license, but it’s not anymore.  Another wrench the CSLB threw in for dba’s is you are now required to register your ‘doing business as’ name with the county or city, which has never been required in the past.

Q:  We spoke a few months back about updating our Nevada license with a new Qualifier and new Officers.  We have finally updated the Secretary of State and are ready to move forward with the license paperwork.  Our new Officers are not US citizens and don’t have INS cards (they live in Spain).  Will that be okay?

A: If they are an Officer and are not going to come to the U.S. to workthey are not required to provide a US Social Security card or INS. But if they are a Qualified Individual they are required to be able to be present at job sites and therefore must establish legal status.

Sharing Contractor Licensing, Transatlantic Experience Credit and Fingerprinting for Inactive License Renewal

You can ‘share’ so much in social media these days, but in the real world of contracting not this! You may detect a slight accent in one inquiry while another contractor plans on mixing business and pleasure while in California…

Q:  You recently helped our Iowa company obtain a California contractor’s license. Can you help me understand whether or not we could allow another entity to use it, such as one of our subsidiaries?  Or, if we entered into a temporary subcontract agreement with another entity, could the subcontractor use our license or vice versa? 

A:  Absolutely not.  One entity cannot “use” another entity’s contractor’s license under any circumstances.

Q:  We spoke a couple of weeks ago regarding our Corporation that is based in the United Kingdom.  You had informed us that our Qualifying Individual needs to document four years of experience.  Does his experience need to be in the United States?  If it makes any difference, he has a license in the UK and it is much more difficult to qualify for a license in the UK than it is in California.

A:  His experience does not need to have been in the US.  I’m not familiar with contractor licensing in the UK, however I do know that being licensed in the UK doesn’t offer any “shortcuts” for him.  If he is licensed in the UK and the requirements are more stringent, I would speculate that he would be qualified for a license in CA,  but give me a call at your convenience to further discuss his background so we can actually confirm it’s ‘trans-Atlantic’ experience. 

Q:  I moved to the Midwest years ago and when I did, I put my CA contractor’s license on “Inactive” status.  I’ve been contacted by a company who wants to hire me as a Responsible Managing Employee (RME).  The company is wanting this license quickly and they said I would need to come to CA to get fingerprinted.  I’m not familiar with the licensing procedure anymore but I don’t remember needing to fingerprint, and I if I did, I don’t remember that I had to specifically do it in California?  I’m trying to plan my summer vacations and if this is necessary, I’ll work a West Coast trip into my plans!

A: I looked up your contractor’s license and you were definitely originally licensed prior to the fingerprinting requirement, so you can “work” surf and sand in to your summer vacation!  Completing the fingerprints via Live Scan makes the licensing process much quicker, as opposed to fingerprinting outside of CA which can add weeks (and sometimes months!) to the process.

Rent An RMO and Foreign Corporation Contractor Licensing

You can’t buy forgiveness or ‘rent’ some things either, despite what rumors may have you believe. Just don’t do it…

Q:  I am looking to purchase a contracting business but I only have experience working on my own houses and family member’s homes.  I understand it is difficult to qualify based on experience gained as an “owner builder”, or handyman tasks that I have done for family.  I’ve heard that it’s possible to “rent” an RMO (Responsible Managing Officer).  How does that process work?

A:  It depends on what exactly you mean by “rent” an RMO.  We hear that term frequently and it means different things to different people.  The proper way to go about the process of obtaining a Contractor’s License when you don’t have the requisite experience is to hire someone who either a) has a current contractor’s license and is willing to act as your Qualifier, or b) has the required amount of experience (4 years of full time within the last ten in the tradeyou are applying for) and is willing to sit for the exams.  Either way, the individual should exercise direct supervision and control of the contracting business. Remember too, if you choose option ‘a’, if the individual does not have at least 20% ownership in your company, he/she would be required to Inactivate their own license.

Sometimes when people refer to “renting” an RMO, they are referring to paying a licensed contractor a fee to Qualify their license, with no intention of that individual being involved in the day-to-day operations of the company.  This is a definite no- No!  The CSLB is always on the lookout for this offense, and if discovered, will take disciplinary action on the Qualifier and the Licensee.

Q:  We applied for a Contractor’s License for our Delaware corporation.  On the license application instructions, it stated that “foreign” Corporations are required to list their President and the Qualifying Individual on the application, which we did.  We just received a letter stating that Corporations are required to list their President, Secretary, and Treasurer as reflected with the Secretary of State, and that all individuals listed must be fingerprinted.  Can you please clarify if this is actually required?

A:  The CSLB used to require foreign corporations to only list their President and Qualifying Individual, however just recently they started following the provisions of B&P Code 7065b(1) with states “Every person who is an Officer, Member, responsible Manager, or Director of a Corporation or Limited Liability Company seeking licensure under this chapter shall be listed on the application as a member of the personnel of record”.  You are correct about the instructions on the license application stating otherwise, but they are in the process of updating the forms to reflect this information. At least, that’s the rumor! 

Concrete Pumping, Exam Waivers and Hiring New Employees

What do you do when your employee number is up? Don’t worry no one was hurt in writing this question, but if they were this is an important answer to know. Another contractor got a ‘concrete’ answer from his legal expert, but this licensing expert has to break it up… 

Q:  I am a licensed contractor and I plan to hire several new employees.  Do I need to report the number of employees to the CSLB for any reason?

A:  No, the CSLB does not require that you report new employees.  The only time you need to notify the CSLB of personnel changes is if the officers on record with the CSLB change, if your qualifier changes, or if you go from no employees (in which case you would likely have an Exemption from Worker’s Compensation on file, to employing CA workers (in which case you would need to have a Worker’s Compensation Insurance certificate on file with the CSLB).

Q:  I currently have a Sole Proprietor General Building (“B”) license that’s been Inactive for about three years now.  I want to add the “C-8” (Concrete) classification to my license in order to obtain a separate Concrete license for a Partnership that I am starting with my business associate.

My attorney said I may be able to Waive the Trade exam based on my General Building license if I can show that concrete has been a significant portion of my work for five out of the last seven years.  What does the CSLB consider acceptable documentation to prove my concrete experience?

A:   Your attorney is referring to B&P Code Section 7065.3, which allows for a Waiver of the Trade exam when adding a classification to your license if you meet the requirements.  As your attorney stated, one of the requirements is the classification needs to be closely related to your current classification and it must have been a significant portion of the work you performed for five out of the last seven years.  So sorry, since your license has been Inactive for three years now, there is no way for you to document using your General Building license for performing Concrete work as required. 

Q:  I currently have a “C-61”/”D-06” (Concrete related services) license in CA.  My company does concrete pumping.  We have some potential work in Nevada.  I have reviewed Nevada’s classification list and it doesn’t appear that they have anything that is equivalent.  Do I even need a license to perform this work in Nevada?

A:  Thank you for contacting us.  If all you are doing is delivering and pumping from the truck then no, a contractor’s license is not required in Nevada.  

Worker Comp, Liability Insurance, PIN Numbers and Rescheduled Test Dates

Let’s start with a ‘liability’ lesson, of particular note for LLC licensees. A reminder on no bidding without an active license and a ‘test’ on exams…

Q:  You recently helped me set up my corporation and obtain a Contractor’s License.  I now have put General Liability coverage in place.  Can this be added to the CSLB site under my license?  Please advise on how I go about doing this.

A:  The CSLB does not put liability insurance on record for corporations.  They only require proof of liability insurance for Limited Liability Companies (LLC’s), so LLC’s are the only type of entity where you will see liability insurance documented on their license.  As you know, customers ask for proof of liability insurance regardless of the type of entity you are, so it’s always good to have!

Q:  I have a pending Contractor’s license application.  I received in the mail a letter with an “Application fee number” and “PIN number”.  Will the official license number be the same as the application number?  One of my potential customers is asking my license number and I was hoping I could give him that number as our “future” number.

A:  No, you will be issued a different license number.  Your application fee number is strictly to monitor your pending application.  There is no way to know what your license number will be until it’s actually issued and you can’t bid work until then. 

Q:  I was scheduled for an exam three weeks out from now.  I hate to delay this process, but I really would like some more time to prepare.  Is there a way to request a later date for the exam? Also, how long do they give you to take the test?  Do you know the configuration of the test in terms of number of multiple choice vs. free response questions?  As you can tell, I’m a bit nervous about the exams.  I’m not a good test taker!

A:  Yes, you can request a later date either by calling the CSLB testing unit, or you can make the request in writing.  You get a one-time free reschedule.  The CSLB allows you three and a half hours for each exam and you take it as many times as you need to within 18 months.  There are no free response questions, all questions are multiple choice.

Q: Your office had informed me of the need for proof of Worker’s Comp if we will be employing California employees.  How do we go about getting Workers comp before we actually have employees?

A:  It is my understanding that most insurance companies can issue a Worker’s Compensation policy prior to your company hiring employees.  The alternative is to hire employee(s), but before you actually allow them on the job working, ensure that your policy is in place.