Archive for year: 2024

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

Breaking new ground with a no, an expert answer for this contractor, which is a big relief many in the industry might also wonder about. A second contractor gets both a yes, and a no in resolving his conundrum. ‘Good to know’ is what this space is all about!…

Q: We recently updated our nationwide Registered Agent when we did some company restructuring. This got me to thinking about our state contractor licenses.  I think I remember having to identify the RA when we applied for new licenses last year in AZ, CA, NV etc.  But I don’t recall ever revising or advising licensing board of changes to the Registered Agent name and address, which is something that has occurred multiple times over the years.  I looked on CA website for a form that would notify CSLB of a change, and I can’t seem to find one.  Is there a requirement out there to make notification of these Registered Agent changes to state contractor licensing boards, or do they somehow get change notification from the SOS state agency, or is there no requirement to keep licensing information on Registered Agent current?  Is it worth worrying about?  Has this ever come up before?

A: I actually have never been asked that before! No, it’s not worth worrying about for the States I handle anyway (CA, NV, AZ). There is no requirement to notify the State licensing boards of an update to the Agent, they always just look on the SOS records if they ever need it. You are correct in that when you originally applied for the NV contractors license, they require that you list your registered agent name and address and I believe when you renew your NV license, they will ask for that as well, but there is no need to notify them of the change in between renewals. 

Q: A few of my colleagues provided your name for CSLB inquiries, and I believe you have also worked with several of our clients. One of our clients (a corporation) is considering whether it may reissue its current license number to a subsidiary or affiliate company to preserve its number before eventually dissolving. Based on my brief research, though a license cannot be transferred, it may be “reissued” in certain circumstances. In particular, I understand it may be assigned to a corporate or LLC subsidiary if applicable BPC § 7075.1 conditions are met. Though the Request for License Number Reissuance explicitly provides for a corporation-to-LLC transfer, it does not list corporation-to-corporation. Before we do anything drastic, two questions: 1. Have you handled similar reissues before? And 2. Is a subsidiary transfer generally the best method to effectuate a reissue?

A: Thank you for contacting me, it is nice to meet you. To answer your question, 7075.1 is interpreted a bit differently by the CSLB. A license can only be transferred from a corporation to another corporation, even if it’s a subsidiary, if the original entity keeps the same CA Secretary of State registration number. Which only occurs with a conversion. That being said, the CSLB really needs to re-write that statute because it doesn’t apply. But yes, you can transfer a license from a corporation to LLC under certain circumstances. 

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

Almost all rules have, but an expert can share what may be little known exceptions! Why would a licensed contractor choose a 64 hour work week? An elevator contractor learns that what went down can come up again, but there will be a test…

Q: Instead of converting our entity type from an ’S’-Corp to an Limited Liability Company (LLC) in Nevada, we would prefer to hold separate licenses under the LLC. Do you know the limit for the number of licenses for which a Qualified Individual is permitted to qualify in Nevada? I am struggling to find that answer on the Board’s website.

A: A Qualified Individual can qualify more than one license in Nevada if one of the following conditions exists:

1. The individual owns at least 25% of each company in which he/she qualified for, OR
2. One licensee owns at least 25% of the other license.

There is nothing in Nevada which specifies a limit to the number of licenses a person can qualify as long as one of the above conditions exists.

Q: I am an Responsible Managing Employee (RME) on a license (CA) and would like to know if I can qualify two separate businesses with the same ownership?  I have no stake in either one.  One company has me as the RME/Qualifier and I would like to be the Qualifier for the other as well.  The classifications would be the same.  I receive a paycheck from both companies and work over 32 hours at each business.

A: An RME can only qualify one license unless either a) one entity you are qualifying directly owns at least 20% of the other, OR b) the majority of the Officers/Managers/Members are the same on both licenses. You will be required to provide a statement to the CSLB certifying that you work for over 32 hours a week for each company and will continue to do so while you are acting as RME for both entities.

Q: We have an incorporated General contractor’s license. When reviewing our list of Officers we saw that our previous “Board Chair” was on there listed as an Officer. We dissociated her when she left our Board of Directors, however we weren’t sure if we needed to add the current Board Chair to our license or not. I couldn’t find anything that said it was required to have that particular position on the license. Do you have any guidance there?

A: The CSLB’s rule is Corporations are only required to list their President, Secretary, and Treasurer on the contractor’s license. Any additional officers that you have are optional. If you want them to have signing authority for the license and be able to communicate with the CSLB, you will want to add them.

Q: I used to have an elevator company that had a “C-11” license. It was suspended eight years ago. I shut the company down and I want to start another company. Can I get another license under a different company name? Would I have to take the exam again?

A: Thank you for contacting Capitol Services. You should be able to obtain a license again, but of course it depends on the reason for the prior suspension. Unfortunately, since it’s been over five years since you were licensed, you would be required to take the exams again.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

While contractor law is written in ink the words can be subject to interpretation. That is where expert understanding is sharpest in avoiding ‘errors’ or misunderstanding…

Q: It appears that, per California Business & Professions Code § 7071.19, professional liability insurance and errors & omissions insurance will also be required at the time of obtaining the General contractor license. Is that your understanding as well? I know when we spoke you had mentioned the need for bonds, liability, and Worker’s Compensation insurance. Are we to ignore the regulation in regards to the E&O insurance?
A: No, you do not ignore B&P Code 7071.19 which is referring to the requirement for liability insurance coverage for Limited Liability Companies (LLC). They use the words “errors” and “omissions” in the statute to describe the reason for needing to maintain liability insurance – “maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the contracting services it provides”. But the CSLB does require that you obtain or show proof of a separate E&O policy. They require that an LLC maintain at least $1 million in general liability coverage.

Q: We need to replace our Qualifying Individual who left the Company recently. The person who makes the most sense to have as our new Qualifier is one of our Officers who is not planning on leaving the company until retirement.

            However, he is concerned about providing his personal information to the CSLB. Can you confirm exactly what personal information he would be required to disclose? Secondly, specific to his ownership shares, is this something that the general public will be able to see online?
A: The CSLB requires the Qualifying party list their full name, residential address, phone number, date of birth, social security number, and percentage of ownership on the application. They ask for a driver’s license number but it’s not required. The CSLB never shares personal information, even if someone was to request a copy of a licensee’s entire file. They always withhold all personal information such as DOB and SSN.
With regards to ownership, on the CSLB’s website the general public will not be able to see the specific ownership amount the Qualifying Individual has in the company, however they will be able to see whether the person owns more than 10%, or less than 10%. This is because if the RMO/RME owns less than 10% of the company, they are required to have a Bond of Qualified Individual on file. If the RMO/RME owns more than 10%, no Qualifier Bond is required. Outside of the website, if the general public wanted to see the specific ownership the Qualifier owns, they would need to make a copy request with the CSLB and pay the fee.

            While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

There are ‘degrees’ of value in a contractor claiming credit toward experience. Another contractor discovers good news that takes a turn for the worse, depending on his choices. While CA has license reciprocity with some other states it’s not a completely free ride as there are still ‘hoops’ to jump through…

Q: I am applying for a new license and there is a question on the application regarding education. I obtained several degrees outside of the US. The application states that if you answer ‘yes’ to the education question, you are required to attach the transcripts. They are going to be difficult for me obtain. Is this really necessary?
A: Only if you are looking for credit in lieu of work experience, but if you are showing at least four years of work experience, no need to go to the trouble to obtain the transcripts.

Q: Can I reactivate my license if it expired in 2021? Thanks for your assistance.
A: Yes! You have five years from the time a license expires to renew it. I looked up your license and your Bond and Worker’s Comp have both (obviously) expired as well so you would need to provide a new Bond and proof of Worker’s Compensation insurance if you have employees. Also, I noticed that you are currently the Responsible Managing Employee (RME) for a corporate license. The CSLB will not allow you to renew your
license on “active” status unless you disassociate from the company license you are Qualifying. An RME can only Qualify one active license at a time.

Q: I am finalizing my CA contractor’s license this week, I am scheduled to take the second exam tomorrow and the CSLB informed me the license would be issued shortly after that. Once I am officially licensed, can I immediately obtain my Arizona and Nevada licenses and not have to sit for the Trade exams?
A: Nevada requires that you are the Qualifying Individual for four years immediately preceding the submittal of your application in one of the reciprocal states in order to qualifyfor a Waiver of the Trade exam. But you will be able to immediately apply for an AZ license and be granted a Waiver of the equivalent trade exam. You would still need to complete their online Statutes and Rules training course.

Q: I am going to arbitration with one of my customers. This is the first time I’ve had to go through this process and I’m wondering if this is going to affect my license. Will it be public information or “red flagged” when anyone looks up my license?
A: Arbitrations are not listed on your contractor’s license when the public looks it up, unless you do not comply with the terms of the arbitration.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com

Capitol Connection Q&A for Contractors

By Shauna Krause, President, Capitol Services, Inc.

Knowledge is how we cut red tape, see for yourself at cutredtape.com where previous contractor Q/A can be found. Keywords offer insight by topic. First, let’s ‘double down’ on a qualifier inquiry, while we also discover some contractor rules are unbending, often depending on the state you’re licensed in…  

Q: I’ve been reading through your Q&A articles and see that two related companies can share a Qualifier if the majority of the personnel on the licenses match between the two entities. Under the same provision, where the majority of the personnel are the same on two licenses, can we add the Qualifier of one of the licensees to the other licensee, and vice versa? So in the end, both licenses will have two Qualifiers on them?

A: No, there is no provision which allows you to have two qualifiers on one license both holding the same classification. Only one qualifier per classification is permitted on a license, and this is true across the board.

Q: I have had my license for some time and over the years I have had and taken the asbestos certification test and passed. I have an ASB certification attached to this license. In addition, I have had a DOSH registration for well over 5 years in the past. Since I have taken and passed the ASB and have the ASB certification on my current license, is there a way to obtain a Waiver for the new “C-22” certification? 

A: Thank you for contacting me. Unfortunately, there is no way to waive the C22 exam, that is the hardest classification to obtain and the CSLB doesn’t bend on offering Waivers for the Trade exam based on passing the ASB certification exam. To qualify for the “C-22” classification, you are required to provide experience, proof of OSHA refresher courses, employee rosters from DOSH showing your name listed there, and of course proof of registration with DOSH.

Q: Can we add the glazing classification to our NV license? I’m hoping we don’t need to re-file since the application process was pretty grueling last time around. 

A: Unfortunately, you cannot add classifications to your license in NV unless they are under the same category, i.e. you currently have a “C-15c” (Insulation) license so you can add any of the other sub-categories of the “C-15” to your license (“C-15a”, “C-15b”, etc). However, since the glazing license is a “C-8” license, you would be required to apply for a new license. Each separate classification requires a separate license in Nevada.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Search past columns at www.cutredtape.com