When you buy a licensed contracting business do you have to give a chunk back in qualifying it? What does an RMO really need? Is there a ‘back to school’ rule for contractors? So many questions, so little space! Got questions of your own you can always call, email or drop in to our Sacramento office for assistance…
Q: Our license expired in 2022 but we have some work coming up in CA so we need to renew it. The qualifier on the license left quite a while ago so we need to replace him. We are actively looking to designate a new qualifying individual. In our search, what are the duties required of an RMO so that we know what to tell them to expect?
A: The CSLB requires that the RMO be responsible for exercising supervision and control of the company’s operations. The minimum requirement would be supervising construction duties, checking jobs for proper workmanship, and managing construction activities by making technical and administrative decisions.
Q: I’m thinking about venturing away from the current contracting company I work for and starting my own business. What are the requirements and costs involved in doing this? What should I do to prepare for the exams? Are there any continuing education requirements?
A: The CSLB requires that you have at least four years of experience performing and supervising the trade work that you are applying for. The cost of the license depends on what type of entity you are wanting to license, corporation/LLC/sole proprietorship. You can contact me and we can go over the costs based on what you decide. Lastly, once you are a licensed contractor in California, there are no continuing education requirements but you are required to renew your license every two years and maintain your bond(s) and insurance if required.
Q: We acquired a licensed business and have applied for a new license using the Qualifying Individual who currently qualifies the business we acquired. The CSLB has requested that he disassociate from the current license in order for the new entity to officially be licensed. However, the currently licensed company still has projects going on. How do companies typically handle this for such acquisitions?
A: You can delay the submittal of the Disassociation for a bit. Once the CSLB requests that from you, you aren’t required to provide it right away, they will keep the application for the new company pending/active for a period of time while you are still working under the current license. However, that obviously delays the issuance of the new license! Be aware that once he disassociates from the current license, that license will have 90 days to continue operating which is usually enough time to finish work in progress.
Q: We are acquiring a business and the seller has suggested that they can come on the license as the Responsible Managing Officer (RMO). Are we required to give them a percentage of ownership to act in this capacity?
A: No, an RMO is not required to have any ownership unless the individual is acting as the Qualifier for another Company at the same time.