Comp Insurance, License Number Advertising and Corp to LLC Transfer

I include a ‘reminder’ worthy of a calendar alert for many! I deliver an answer on ‘trucks’ for a contractor and ‘transfer’ a lesson on licensing as a business changes hands…

Q: We need to get a license for one of our subsidiaries. Can we use a person who is on our Board of Directors as a Qualifier? He is not an “employee” so I wasn’t sure if he can be our Qualifying Individual. He is however an employee of our Parent Company.

A: An employee or an Officer can act as your Qualifying Individual. Directors are considered Officers in the CSLB’s eyes, so the answer is yes.

Q: We are applying for a “B” (General Building) license. Once it’s issued, we will be adding several classifications to the license (“D-28”, “D-21”, etc.). Do we need to display both the license number and all the classifications associated with the license on our trucks?

A: Just the license number and the business name as shown on the license are required to be displayed on your trucks and advertisements. There is no requirement to list your classifications.

Q: You are currently helping us with a license transfer from Corporation to Limited Liability Company) LLC. I am selling the business and the buyer is going to operate as an LLC. My son has been running the day-to-day operations for many years now and the buyer is planning to keep him onboard. I remember when we spoke years ago you had mentioned that my son would eventually be able to take over the license without having go through testing. Will he still be able to do that eventually or does the transfer we are doing now eliminate that option?

A: No, it does not in your situation. Since we are transferring the license number from the Corporation to the LLC, the license will continue so he will still be able to replace you as the Qualifier when you are ready if your son has at least five years of W-2’s showing he’s worked for the Company.

Reminder regarding Worker’s Comp insurance: Last week we reminded contractors of the increase in bond amounts to take effect on January 1, 2023. Also starting January 1, 2023, concrete (“C-8”), HVAC (“C-20”), asbestos abatement (“C-22”), and tree service (“D-49”) contractors will be required to have worker’s compensation insurance, regardless of whether they have employees.

According to the CSLB, “research confirms that many of the approximate 50 to 60 percent of licensed contractors who currently claim an exemption to worker’s compensation insurance do use employees. This problem creates an unfair competitive disadvantage for law-abiding contractors who are subject to higher business costs and puts employees and the public at risk for workplace injuries. CSLB hopes to protect the public and level the playing field for law-abiding contractors by requiring more contractors to carry worker’s compensation insurance starting in 2023 and eventually all contractors by 2026.”