RME/ Sole Owner Reactivation, LLC Licenses and Multi-State Licensing

Keeping your paperwork up to date is important for contractors, and especially in the ‘right’ order! A couple of inquiries concerned with Limited Liability Companies get multiple answers, and for another it’s all about ‘lead time’…

Q: We are currently licensed in CA, NV, and AZ.  Our corporation recently converted to a Texas LLC, and we need to update the Contractor Boards in each State. The former owners sold their Shares and the new owners switched the entity to a LLC.  So, while we still have the same EIN, the ownership structure has changed, and I believe the need for re-registering with each Secretary of State will be required. Will new Contractor’s license numbers be required?  

A:  Nevada has an option to complete Conversion paperwork with both their Secretary of State and the licensing Board.  Therefore, you likely will not need a new Contractor’s License Number in Nevada, but there is paperwork you will need to complete to update the license.  For CA and AZ, the new registration and structure/ownership change, you will need to apply for new license numbers.

Q:  I am interested in obtaining a Contractor’s License for a new LLC I am setting up.  Currently, I am licensed as a Sole Proprietor.  Is there a way to time it so that the LLC license is not issued until January 1st?  I would like to finish out the year as a Sole Prop and not incur taxes related to the LLC until 2022.

A: Given that you are thinking well enough ahead of time, you can certainly come close!  With an appropriate amount of lead time, there are ways that you can get pretty close to your goal date by submitting required documents at “just the right time”, but it does take some strategizing. I would be happy to discuss further with you so please contact my office.

Q:  I am currently the Responsible Managing Employee (RME) for my Employer.  I have an Inactive Sole Owner license.  I would like to activate my personal license and start using it.  Am I able to do this without my current Employer seeing?  My intention is to resign once my license is Active, but for obvious reasons I don’t want them finding out prematurely.

A:  An RME is only permitted to be on one Active license at a time, so when you apply to activate your own license, the CSLB will not complete the activation until you Disassociate from your Employer’s license.  Once you complete a Disassociation Notice, your Employer will be notified that their Qualifying Individual has Disassociated and they will have 90 days to replace you on the license.