I am expert in almost all things that relate to contractor licensing, however my decades of experience also offer direction about other industry issues. When I don’t know or am not qualified, I will know who is and share that. There has been a lot of activity around LLC licensing and these questions are just a few…
Q: You helped us set up our Limited Liability Company (LLC) and obtain our Contractor’s License a couple of years back. As you know, we were required to obtain a $100,000 LLC Employee/Worker Bond. The License and the Bond are set to expire in May. Is the Bond something that we need to keep in place as long as we have the California Contractor’s License? Or is it something that was just required for the new license, but we can now let go since we are established?
A: LLC’s are required to keep both the Contractor’s Bond and the LLC Worker/Bond in place at all times to maintain an Active License.
Q: We are in the process of transferring our Corporate license number to a newly formed LLC. We submitted the application for the transfer in December and it is still in process. We received notice that our Corporate license is suspended due to an expired Worker’s Comp policy. Am I correct in assuming there is no need to renew the policy for the Corporation, and instead we should be transferring it to the LLC’s name (which we’ve already done by the way)?
A: No! You will need to renew it for a period of time at least. The CSLB requirements for transferring a Contractor’s License number from a Corporation to an LLC include “the existing corporation license is in good standing immediately before its cancellation in connection with the application for an LLC license”. I’m not an insurance broker, so check with one, but I believe you can have one policy which covers multiple entities. So, to meet the CSLB requirement for transfer, you’ll need to provide them with an updated certificate in the Corporation’s name which will put the license back in Active status and allow the transfer to be completed.
Q: Is it true that in order to obtain a CA State Contractor’s License the firm must be a domestic CA entity and not an entity formed outside of CA?
A: No, that is definitely not true. In order to obtain a CA Contractor’s License, Corporations and LLC’s are required to be registered with the CA Secretary of State, however they can be either domestic or foreign. Both are permissible.