Foreign Corporation to LLC, RMO to RME Change and “C-61” Rule

Being halfway right is not going to help our first inquiry. That’s why getting an expert opinion first is always a ‘power’ move. The second is nearly all wrong, and I offer an out of state contractor assistance in being ‘reasonably’ sure, before you play ‘chicken’ with your CA and NV licenses…

Q:  When doing some research, I noticed there are several “C-61” classifications and none of them require a trade exam, is that correct?  Does that also mean an individual doesn’t need to have any experience to be the Responsible Managing Officer (RMO) on a “C-61” license? I’m looking into purchasing a Power Washing company and the current Owner has had a “C-61”/”D-28” License for years, but I have no experience doing Power Washing (besides minor things at my own property).

A:  You are correct in that there is no trade exam for any of the “C-61” classifications, however the CSLB requires that the Qualifying Individual have four years of full-time work experience in the trade they are applying for, regardless of the Classification.  With no experience in the “D-28” classification, you will not be approved to become the RMO on the license.

Q:  What is involved in notifying the CSLB that an RMO is changing to a Responsible Managing Employee (RME)?  I am in the process of buying my long time Employer’s business/license number.  He is planning to stay on the license for at least six months to ensure everything continues running smoothly before he officially retires, but he wants his title changed to Employee instead of Officer while still in transition. Is it as simple as a letter informing the CSLB of the title change?

A:  No, almost nothing is that simple when it comes to the CSLB!  There is an application which needs to be completed, signed by the proper individuals, and if the RMO has not been fingerprinted for the CSLB in the past, he/she will be required to complete that as well.

Q:  Our Company is going through some transitions and restructuring in the near future.  We have licenses in several States including California and Nevada.  We are converting the Corporation to an LLC in our Home State of Delaware, and then we will be updating the State Boards and the Secretary of State’s in each State.  In looking in the State Board’s requirements in NV and CA, it appears we are required to apply for new licenses, and they will not be approved until the conversion is verified at the Secretary of State level.  This seems like a “chicken and egg” scenario.  They are requiring we first convert, however as a “risk manager”, I’m worried about the potential of the LLC applications being rejected by the State Boards, potentially leaving us with no Contractor’s License and an inability to get our corporate license back (because the Corporation would no longer exist).  Is there any way to confirm the LLC application will be “accepted” prior to completing the conversion?

A: We can always review your proposed changes/updates and confirm it appears to be achievable (or at least workable) and then run the scenario by the State Boards before the filings are finalized to ensure there are no noticeable “red flags”, however it is not possible to guarantee 100% the application will be approved.  There is always a potential for an unforeseeable issue to arise, I suppose nothing is 100% foolproof.  That being said, I am quite certain we will be able to assess the situation and be reasonably confident whether there would be any cause for rejection.