Contractors are tough, but ‘growth’ is not without pain, even for these men and women. While ‘misdirection’ works in magic acts, it’s costly and time consuming when a contractor loses focus on ‘facts’. I will wrap up with a ‘memory fail’ that is also a lesson on getting expert advice before the wrecking ball swings into action!…
Q: Our company is going to be acquiring a business that holds contractor’s licenses in Nevada and Arizona. Will these existing licenses be transferrable to the new entity we are forming?
A: No, contractor’s licenses in Nevada and Arizona are not transferrable from one entity to another. You will be required to obtain a new license in each State for the new entity you are forming.
Q: We are applying for a Nevada Contractor’s license. I let my boss know about the financial requirement and he is balking at getting a CPA reviewed financial statement. He said it is pretty expensive to have that done. Our max job in Nevada would be $100,000. Would a tax return or a credit report also do the trick? We have excellent credit.
A: For a monetary limit of $100,000, a compiled financial statement with full disclosures prepared by a CPA dated within the last 6 months is required. That’s the facts. A reviewed financial is only required for limits over $250,000. From what I understand, a compiled financial statement is not quite as pricey as reviewed. A tax return or credit report will not be accepted in lieu of the compiled financial statement.
Q: You are helping us with a contractor’s license right now and we decided we want to register our LLC with a ‘dba’ (doing business as) name with the California Secretary of State. How do we go about doing that on the forms you sent us?
A: You can only have a ‘dba’ name with the CA Secretary of State if your business name in your home state is not available. Since your business name is available, you will only be able to file that ‘dba’ name with the CSLB. At that point, you can either do business as the entire name listed on the license, or just the ‘doing business as’(dba) name.
Q: We are going to be filing for a Joint Venture (JV) license with two other entities. Typically, when we file for JV licenses we file the Exemption from Worker’s Comp, however in this case, one of the entities has an RME (Responsible Managing Employee). Does that create the need for the JV to obtain a Worker Comp policy?
A: No it does not. The RME is an employee of one entity, which is part of the JV, but the RME is not a direct employee of the JV itself. As long as the Joint Venture entity itself will not have direct employees, you can file the Exemption from Workers Comp,
Q: I currently have a corporate contractor’s license. My Son has worked for me for over ten years and I’d like my Son take over the business eventually. If I were to make him an Officer and have him replace me on the license as RMO (Responsible Managing Officer), does that remove me from the license? I’m not sure I’m ready to remove myself from the license, but at the same time, I want to take care of this in case anything were to happen to me unexpectedly. Thank you in advance for your advice.
A: No, you do not have to remove yourself from the license. You do, however, have the option to remain on the license as an officer when you apply to have your son replace you as RMO.
By Shauna Krause, President, Capitol Services, Inc. Email: [email protected]