LLC Licensing, JV Separation and Criminal History

Change is always a constant in life and business, it’s just not ‘automatic’ in some cases. Another contractor shares his story which I ‘venture’ will come with a bunch of plot twists. I will wrap with a little ‘history’ lesson some applicants will want to study…

Q: I hired a new employee who was the Responsible Managing Employee (RME) for his previous company. He left the Organization earlier this year and disassociated his license from them. Does the license remain with the Limited Liability Company (LLC) for them to assign a new RME to it? Does my employee have a license in CA now? If he’s the one left without a license, how does he go about obtaining the license he tested for?

A: The license does belong to the LLC, so you are correct, it is up to them to assign a new Qualifying Party to the license. Your employee doesn’t automatically have his own license once he disassociated, however he qualified to obtain the license he tested for without the need to re-take any exams. He has five years from his date of disassociation to do this. 

Q: We have a Joint Venture license that was formed to bid on some work after the CA wildfires. The contract was awarded to the Joint Venture and the work was complete, but there may be some minor repair/warranty work remaining. One of the JV entities has agreed to sell their interest in the JV to the other entity. At the time of the sale, that entity will withdraw/disassociate from the Joint Venture. What impact will that on the license? Will it immediately be terminated? If so, can the JV obtain an extension from the CSLB to complete the contract closeout and any repair/warranty work?

A:  When one of the JV entities disassociates, the JV license will be cancelled. The remaining entity can request a continuance of the license to complete projects contracted for or in progress prior to the date of the disassociation. The continuance can be requested for a “reasonable amount of time” to be determined by the Board. The request must be made in writing and received within 90 days of the disassociation of entity being removed. 

I would suggest providing a copy of your warranty to the CSLB to show the time it covers. If it’s a year, they may give you year (?) Otherwise, obviously transfer the contracts to the entity who will be performing the work for when the continuance expires.

Q: I want to obtain a CA Contractor License, but I have a criminal history from when I was, no other way to put it, young and dumb. What are my chances of being approved? I read that I need to pass a Background check.

A: The determination is made on a case-by-case basis, but the CSLB will review your history to determine if the crimes are substantially related to the duties of a Contractor. Criteria they use to make this determination are, nature and gravity of the offense, number of years elapsed since the date of the offense, and the rehabilitation efforts made. If you’d like, you can call me to discuss your individual situation.