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Kalb's Q & A For California Contractors

Q: I saw two active CSLB license numbers listing what appears to be the same corporation name. Is this legal? Can a California corporation be assigned more than one Contractor's License number at the same time? Does the CSLB tie the State Corporate number to the License? PS: Keep up the great columns! A: Regarding your questions: It is perfectly legal for a corporation to have more than one lic...

June 02, 2008

Q: I saw two active CSLB license numbers listing what appears to be the same corporation name. Is this legal? Can a California corporation be assigned more than one Contractor's License number at the same time? Does the CSLB tie the State Corporate number to the License? PS: Keep up the great columns!

A: Regarding your questions: It is perfectly legal for a corporation to have more than one license number. In fact I am aware of some companies that have four or more licenses for the same corporation. These are tied to the same corporate number and can be structured in several ways.

If a corporation wanted to be separately licensed in several different classifications, they could have a different license number for each entity. In this way the company could sign contracts under different names yet be part of the same corporation. For instance, they may want to identify their plumbing operations separately from their HVAC business. It is my understanding that the CSLB will not allow a company to simultaneously have two license numbers for the same corporation with the SAME classification.

A second reason a corporation might want to have more than one license number is to retain the business names of companies they purchase. For example, an existing company purchases three businesses. They retain their existing license and apply for three new licenses each with a 'Doing Business As', or 'DBA' designation. The end result is four license numbers for four separate entities under one corporation (and one corporate number).

Finally, if a company wanted to divide themselves into divisions so each would have a separate license number, they could apply for multiple licenses in order to bid under these different names. In this case rather than a 'DBA', their business name would, for example, read: XYZ Construction, a division of USA Building Company, Inc.

Q: I understand that the CSLB will not issue a contractor's license to an LLC. In addition, I heard the CSLB won't issue a license to a partnership (general or limited) where an LLC is a general partner. Any changes to this status? Any pending legislation?

A: There is no pending legislation that I am aware of. The CSLB still will not issue a contractor license to an LLC or a license to a partnership (general or limited) where an LLC is a general partner. It's status quo for Limited Liability Companies.

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