Let’s ‘file’ the rough edges off a new rule on those ‘doing business as’ in California. Another contractor’s best laid plans crash when they get ‘waived’ off while another RME problem may have two ‘individual’ solutions pending the final test…
Q: We are a sign installation company, but we are needing to get a General Contractor’s license in CAso we can be the prime contractor on our jobs. Our business name is “ – – Signs”. The CSLB rejected our application stating we need to register a ‘dba’ (doing business as) name because our company name is incompatible with our “B” classification. What is involved in registering a ‘dba’ name?
A: That sounds accurate! While I’m not super familiar with registering ‘dba’ names since this is a new requirement the CSLB implemented, it is my understanding you file the fictitious name with the County Clerk where you intend on conducting business or nearest to your business address. If you aren’t going to have a CAaddress, you can file the ‘dba’ with Sacramento county. You then provide proof of the filing to the CSLB.
Q: I obtained a Corporate license about four years ago using a Responsible Managing Employee (RME) who was not using his personal license, with the understanding that after five years of being licensed, I (as the only Officer of the company) would be able to replace my RME on the license and request a Waiver of the exams. At my CPA’s recommendation, I formed a Limited Liability Company (LLC) last year to replace the Corporation. I brought on a couple of partners, so we didn’t meet the requirement to transfer the license number because the personnel changed so we ended up with a new license number. Between the two companies, it has now been five years and I’m ready to replace my RME. Can you assist with that process and getting the approval for the Waiver?
A: We can definitely assist with the replacement process, however, unfortunately you are not going to qualify for a Waiver of the exams. In order to qualify, you have to have been an Officer/Member/Supervisory employee of the company for five out of the last seven years. You cannot use two different entities combined (Corp/LLC) to add up to the five years and qualify for the Waiver.
Q: Our current RME gave his notice that he will be leaving our company to start his own business, so we need to replace him on our license. He has agreed to remain on the license until we replace him. We have a couple other candidates in mind. Is the best way to proceed to have each individual obtain their own personal license, or should we just have one of them apply outright to replace the current RME? I’m just wondering if filing the replacement application automatically starts the 90-day clock ticking. We don’t want our license to lapse in the event our new person doesn’t pass the exam!
A: Understandable! Filing the replacement application does not automatically start the 90-day clock. If your current Qualifier has agreed to stay on board until you replace him, there is a box you can check on the replacement application to not remove him/her until the new person is officially added to the license.
Q: We are a flooring contractor and have both the “C-15” (Flooring) and the “C-54” (Tile) license. We have been licensed since 1988 as a Corporation and we just recently formed a Limited Liability Company, so we need to transfer the license to the LLC.
Our corporate business name is XYZ Design Inc., so naturally we applied for the new LLC as XYZ Design LLC. Our application was rejected, asking for us to add a dba such as “XYZ Flooring Design”. We have been XYZ Design Inc. for over 30 years, has something changed with moving from a Corporation to an LLC that is triggering this? Our ultimate goal is to be known by our legal name. “Changing our name” sounds like an administrative nightmare!
A: The CSLB has been “enforcing” B&P Code section 7059.1 more than ever before (at least in my experience), which states “A licensee shall not use any business name that indicates the licensee is qualified to perform work in classifications other than those issued for that license, or any business name that is incompatible with the type of business entity licensed.”
They are rejecting business names for being “too vague”and have determined that words such as “Services”, “Systems”, or “Design” can only be used if they are in conjunction with your classification, hence the suggestion of “XYZ Flooring Design”. This is fairly new, which is why your business name was acceptable when you originally obtained the license, but it’s not anymore. Another wrench the CSLB threw in for dba’s is you are now required to register your ‘doing business as’ name with the county or city, which has never been required in the past.
By Shauna Krause, President Capitol Services, Inc www.cutredtape.com