The first question you must answer is, what is my business name? The second question is, which relates to the first question, what type of business entity will I be?
Let’s take the first question.
A business name can be your personal name or a fictitious business name (FBN), also referred to as a DBA or Doing Business As. The Contractors State License Board has specific requirements when it comes to a contractor’s license business name.
If applying for a sole owner, or sole proprietor license, you can use your personal name as the business name. Of you can use an FBN. If you choose to use an FBN, you’ll want to make sure it is available within your city or county to register, and this registration is required no matter what business entity you go with.
As I discussed in a previous post, a business name that denotes any trade classification must denote the classification being applied for. If you are applying for a plumbing license and your business name is ABC Solar, the CSLB will require you to provide a DBA that includes the word “plumbing” in it. If your FBN is Apples to Apples, then the CSLB won’t ask you to change it or add a DBA because Apples to Apples does not denote any trade classification.
Now the second question.
Will you operate as a sole owner, partnership, corporation, or LLC? These entity types have their own specific requirements.
Sole Owner: Just you, or you and an RME qualifier
Partnership: You and one or more other partners
Corporation: Just you, or you and a qualifier, and other officers. Note, officers listed on the corporation record with the Secretary of State must also be listed on the license application.
LLC: Just you, or you and a qualifier, and other managers or members. Note, an LLC license has an additional bonding requirement that ranges in price from $1250 to $5000 a year. All LLC members of managers listed on the Sect. of State record must also be listed on the license application.
Once you’ve tackled the business name question you can move on to Section 2 of the app. Here you’ll check the appropriate box for your business type.
A partnership requires a partnership EIN that is obtained from the IRS. The number will be in this format: XX-XXXXXXX.
A corporation requires a Corp number that is obtained from the CA Sect. of State. The number will be in this format: CXXXXXXX.
An LLC requires and LLC number that is also obtained from the CA Sect. of State. The number will be in this format: XXXXXXXXXXXX, and it begins with the year the LLC was formed.
Note: A partnership, corporation, or LLC must be formed prior to submitting your license application to the CSLB.
Here you will list the qualifier’s information. The qualifier is person who has the experience and will be taking the CSLB exam(s). Note: the qualifier can also be the sole owner, sole officer or sole LLC member, unless the qualifier holds no officer or manager/member positions. If the qualifier is not a sole owner, sole officer, or sole manager/member, then the sole owner, officers, or manager/members information will be listed in Section 4, page 2 of the application.
Please see my next post for how to complete Section 4, or page 2 of the CSLB license application.
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