Any test taken is always a bet you hope to win. Sometimes passing it is the only way to ‘win, place or show’as our first contractor discovers. There are times when the label placed on something is almost ‘self-explanatory’, but not always as we learn in a ‘liability’ question followed by another on restoring a revoked license…

Q: We have an employee who has many years of experience doing all aspects of General Building work. We want him to be our Responsible Managing Employee (RME) for a new license, but he is not a “book” guy and is nervous about the exams, particularly the “law’ exam. What is the purpose of the law exam, what does it consist of, and is it possible to have someone in the office take that portion of the exam?

A: The main purpose is for the applicant to demonstrate they know how to run a contracting business. It consists of questions related to this knowledge such as business finances, business organization, bonds, insurance, contracts, licensing, safety, and public works. The same individual who is qualifying the trade portion of the license is required to take the law portion of the exam.

Q: I’ve been self-employed and doing construction work for family, friends, neighbors, etc. for over five years now. I’m ready to get my own license so I can start advertising for the services I provide. How will the CSLB verify my experience? I read on your website that it’s difficult to qualify with self-employed experience. I take pictures of all my work and can get my customers to sign statements.

A: You are correct in believing that qualifying for a Contractor’s License is difficult with self-employed experience. That work can be difficult for the CSLB to assess. They absolutely will not consider photos as valid proof of your work background. You would need to provide some type of verifiable evidence that the work was done to code. Permits you pulled, contracts, invoices, etc.

Q: I have a “B” license and I typically do small/average home improvement jobs. I have been asked to do a fairly large remodel job and the customer is asking that I obtain General Liability coverage. I am bonded and I don’t have any employees, although I do use subcontractors. Is it required that I carry liability insurance?

A: While it is a requirement, by law, for a home improvement contractor to notify the homeowner whether or not they carry General Liability coverage, it is not a requirement for contractors to have liability insurance. Notifying the homeowner must be done in writing, and the information must accompany the bid. The CSLB strongly recommends that contractors carry liability insurance. Without it you have everything to lose should something go very wrong.

Q: You were originally helping us with transferring one of our Officer’s Sole Owner license number to our newly formed Corporation. The transaction would have involved issuing 51% ownership to the Qualifying Officer in order to retain his Sole Owner license number.

However, we are changing for the option to issue each of the three Officers 33% interest in the company. Is the paperwork you sent us still the same, or does it require new/different paperwork?

A: The paperwork would remain the same. Either way it’s Original Contractor’s License (Examination Waiver) application.

Q: We have an employee with an Inactive contractor license and we would like to utilize his qualification to be the RME (Responsible Managing Employee) on our license. Would he be required to re-activate his license prior to applying for the company license? We just don’t want to pay the additional fees if it’s not necessary.

A: No, that is not required. In fact, RME’s are only allowed to Qualify one Active license at a time, so even if you reactivated it, he would be required to Inactivate it again to be added to the company license.

Q: I was wondering if it is possible to move our current license number to a different company, the new one is an LLC. We want to close down the Corporation, but at the same time, we don’t want to lose our low license number. Is this possible?

A: A corporation can transfer its license number to a newly formed LLC under certain circumstances:

  1. The existing Corporate license is in good standing immediately before it’s cancellation in connection with the new LLC;
  2. The LLC was formed by a Corporation to continue the business of the corporation; and
  3. The personnel listed for each entity are the same.

By Shauna Krause, President, Capitol Services, Inc. www.cutredtape.com