Here's a quick quiz for contractors. How many licenses can a corporation apply for? If you're not sure, you may be surprised by the answer given to one of our contractor inquiries. Unfortunately, another contractor will be disappointed to learn there is little help in his situation. Don't let this happen to you. How much of the company do you need to own to have your license number assigned to a corporation as the RMO? Those answers and more in this “Capitol Connection”…

Q: Please remind me: What is the process for adding a “dba” to an existing corporate license? Is there a limit to the number of “dba's” per license? If so, how many are allowed for each license?

A: A corporate contractor's license can have a “dba.” If the company wants to conduct business under a second or third “dba,” each must have a separate license number. For instance, say your company has three classifications and you want to conduct a separate business under each one. You can keep the existing license and add a “dba,” apply for a second license with a different classification using a second “dba” and then apply to 'do business as' (DBA) under a third license name style.

Since each “dba” would be tied to the same corporation, there is no limit on the number of licenses a company can apply for. This is not the case if each entity was a unique corporation with a separate corporate number. Then there is a limit of three licenses that can be qualified by any one individual in a given year.

Q: I do not understand why my bond is being cancelled on my partnership license. Could you look into this for me? PLEASE HELP!

A: I wish I could help you on this; however, my research indicates your license expired over six years ago. After five years, a license is no longer renewable. If you want to reapply for this license, the partners must be the same. Any changes and it won't work.

You may want to contact the bonding company and find out why they cancelled the bond now, or more importantly, why they kept issuing a bond on an expired license? Since an expired license cannot legally contract, there is no reason to have a bond.

Q: At the end of the licensing process, will the CSLB issue our company a NEW contractor's license number or will we be issued the responsible managing officer's (RMO) EXISTING (inactive) license number?

A: When someone qualifies as the RMO on a license, the company is almost always issued a new license number. The qualifier's existing license remains as is. The only exception would be if the RMO owned 51 percent or more of the company and chose to have his sole owner license re-issued to the corporation. As we discussed, this is not the case in your situation, as the RMO only owns 2 percent of the voting stock.

Q: Can a problem with someone's sole owner license impact an unrelated corporate license? What if the sole owner is not the RMO on the second license?

A: If someone qualifies two licenses, there is automatically some connection between the entities – especially if a problem develops. If your RMO has an unresolved problem on another license, which leads to a suspension or judgment, this would likely impact all licenses he is listed on – regardless if the person is the qualifying individual. If the person will not clear up the issue on his sole owner license, you may want to consider removing him as your RMO.

Q: I currently have a sole proprietorship business with an “A” license with additional classifications. I will be incorporating soon with a partner who also has his “A” license and additional classifications that are different from mine. We were looking at 50/50 ownership. Can we use one of these license numbers for the corporation and whose number should we use? Thanks.

A: Since you will both own 50 percent of the corporation, the CSLB will not allow you to use one of your licenses for this new company. The corporation will be issued a new license number. A sole owner has the option of transferring his or her license to a new corporation only if ownership is 51 percent or more.

It's up to both of you, regarding who should be the qualifier for the “A” classification. It will not matter to the CSLB who is listed as RMO for general engineering.

What you need to make your contractor's application move quickly through the CSLB is sometimes right at your fingertips. You can 'do it yourself,' but other times, like our second contractor, it's a good idea to ask an expert. I'll help him get 'pumped up' to add a new classification without taking a test. Finally, there may be a 'yes' and 'no' answer when you want to start changing a partner's relationship with the company …

Q: Our company is interested in building gas stations. We are a “B” general contractor. Do we need a special license to build these stations or will the “B” work?

A: A “B” contractor can handle construction of commercial buildings, including gas stations. This assumes you are building the entire structure or at least handling more than two unrelated trades. There is a specialty classification (“C-61”/“D40”) for Service Station Equipment and Maintenance that covers the installation of underground storage tanks up to 20,000 gallons as well as installing the auto hoists, air hoses, grease racks, gas 'pumps,' etc. If interested, there is no test for this trade; however, the applicant must show four or more years of experience.

Q: We have a partnership license. Can we change our qualifying partner (QP) to an RME? If not, can we simply cancel this license and apply for a new license with the same business name?

A: Changing the QP to a RME would cause the license to be canceled. Any change of a general partner (adding or subtracting) results in the license being cancelled. Yes, you can choose to cancel the existing license and reapply for a new one with the same name. (A new license number will be assigned.)

Legislation enacted by the state Legislature and signed by the governor should help small businesses throughout California. AB 761 (Coto) requires each state agency to establish a 25-percent goal for the participation of small businesses in the construction of the state's infrastructure contracts.

The various infrastructure-related bond acts passed by the voters in 2006 set the above goal in order to encourage participation of small businesses in the construction of the state's infrastructure. This includes, but is not limited, to Highway Safety and Traffic Reduction, Housing and Emergency Shelter, Kindergarten-University Public Education Facilities, and Disaster Preparedness and Flood Prevention.

To qualify, you will need to be registered with the state Dept. of General Services (DGS) as an officially recognized “small business.” For information on this program and how to get certified, contact the OFFICE OF SMALL BUSINESS AND DISABLED VETERAN BUSINESS ENTERPRISE CERTIFICATION (OSDC) by phone at 800-559-5529 or on the web at http://www.pd.dgs.ca.gov/smbus/default.htm.

Knowledge is power. Knowing where to go for the answers is half the battle.

Get expert assistance immediately when you call 916-443-0657, e-mail info@cutredtape.com , fax (916) 443-1908, or write me at Capitol Services, Inc., 1225 8th St. Ste. 580, Sacramento, CA 95814.