Are you a contractor looking to expand your operations into California? Unsure what type of license is needed? Not sure what is required for proper licensing? Then this article is for you.
Determining Type Of License
The first step in obtaining a contractor’s license is to determine the appropriate type of license needed for your operations. In California, there are three general categories of contractor’s license: (1) Class A General Engineering Contractor; (2) Class B General Building Contractor; and (3) Class C Specialty Contractor.
- General Engineering License
A General Engineering license is much boarder than a General Building license and allows the contractor to work on projects such as waterways, airports, bridges, utility or industrial plants, highways, mines and numerous other scopes. Business and Professions Code §7056 provides additional detail regarding the scopes of work covered under a General Engineering license.
- General Building License
A General Building license is more limited than a General Engineering license, allowing work on any structure built for “the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind” and “requiring the use of at least two unrelated building trades or crafts, or to do or superintend the whole or any part thereof.” Moreover, a general building contractor cannot enter into a prime contract for any project “involving trades other than framing or carpentry unless the prime contract requires at least two unrelated building trades or crafts other than framing or carpentry, or unless the general building contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor to perform the work.” Additional information about the allowable scope of work for a General Building contractor’s license is set forth in Business and Professions Code §7057.
- Specialty License
The contractor can also obtain specialty licenses or contract with subcontractors who hold specialty licenses for any additional scopes of work, including: C2 Insulation and Acoustical Contractor; C4 Boiler, Hot Water and Steam Fitting Contractor; C5 Framing and Rough Carpentry Contractor; C6 Cabinet, Millwork and Finish Carpentry Contractor; C7 Low Voltage Systems Contractor; C8 Concrete Contractor; C9 Drywall Contractor; C10 Electrical Contractor; C11 Elevator Contractor; C12 Earthwork Contractor; C13 Fencing Contractor; C15 Flooring and Floor Covering Contractors; C16 Fire Protection Contractor; C17 Glazing Contractor; C20 Warn-Air Heating, Ventilation and Air-Conditioning Contractor; C21 Building Moving/Demolition Contractor; C22 Asbestos Abatement Contractor; C23 Ornamental Metal Contractor; C27 Landscaping Contractor; C28 Lock and Security Equipment Contractor; C29 Masonry Contractor; C31 Construction Zone Traffic Control Contractor; C32 Parking and Highway Improvement Contractor; C33 Painting and Decorating Contractor; C34 Pipeline Contractor; C35 Lathing and Plastering Contractor; C36 Plumbing Contractor; C38 Refrigeration Contractor; C39 Roofing Contractor; C42 Sanitation System Contractor; C43 Sheet Metal Contractor; C45 Sign Contractor; C46 Solar Contractor; C47 General Manufactured Housing Contractor; C50 Reinforcing Steel Contractor; C51 Structural Steel Contractor; C53 Swimming Pool Contractor; C54 Ceramic and Mosaic Tile Contractor; C55 Water Conditioning Contractor; C57 Well Drilling Contractor; C60 Welding Contractor; C61 Limited Specialty; ASB Asbestos Certification; and HAZ Hazardous Substance Removal Certification.
To the extent that a trade does not fall within any of the limited specialty classifications above, it is likely that a C61 limited specialty license is required. An applicant can contact California’s Contractor’s State License Board to inquire further and determine whether a limited specialty license would be appropriate. To the extent that the Contractor’s State License Board disagrees that a Class 61 license is needed, the Board will likely advise as to what other classification it recommends or will set up a new classification under C61, subclass 64 for non-specialized licenses.
Steps To Obtain A Contractor’s License
Once your company determines which type of license to obtain, the following steps should be taken to apply for a contractor’s license:
- Register Your Company With The Secretary Of State
In order to conduct business as a licensed contractor, your company must be registered and in good standing with the California Secretary of State.
- Appoint A Responsible Managing Officer Or Responsible Managing Employee
The person designated as the responsible managing employee: (1) must have four or more years doing journeyman level work in the applicable trade; (2) must be a bona fide employee of the company applying for a license; (3) must be actively engaged in the classification of work for which that responsible managing employee is qualifying on behalf of the applicant and have the proper knowledge and experience in the area of classification; (4) must be responsible for exercising direct supervision and control of his or her employer’s construction operations to secure compliance with the laws applicable to contractors and licensing; (5) must pass a criminal background check by submitting fingerprints; and (6) shall not hold any other active contractor’s license while acting, except as allowed under California Business and Professions Code §7068.1.
- Take The Appropriate Examinations
Law and business examinations, trade examinations (depending upon the type of license being sought), and asbestos examinations (required even if the applicant is not performing asbestos work) need to be taken. In order to prepare for the examinations, reference guides are available at www.cslb.ca.gov. Many companies also offer courses to prepare for the licensing examinations.
- No Examination May Be Required
The examination requirements may not be required under certain circumstances. First, no examination may be required if, within 5 years, the qualifying individual personally passed the written examination for the same classification or has served as a qualifying individual for a licensee whose license has been in good standing and is in the same classification.
Second, the qualification and examination requirements may be waived where there is reciprocity with another state in which the applicant is licensed, the contractor is licensed in the other state in a similar classification, the license from the other state is proven by written certification to be in good standing for the previous five years, and California’s license board in its discretion decides that the professional qualifications and conditions of good standing for licensure are the same or greater as in California.
- Submit The License Application And Fee
Applicants must complete and return the contractor’s license application form and pay the fee for the application. The form can be located at www.cslb.ca.gov and the fee is currently $330 (note that the fees are subject to change). The application must be signed by both the applicant and by the person qualifying on behalf of the company. The forms to be completed include: (1) an application for original contractor’s license; (2) a certification of work experience; (3) an Additional Personnel form if there are additional personnel to report on behalf of the applicant; and (4) a disclosure statement regarding criminal plea/conviction.
- Post A Contractor’s License Bond
The contractor must post a contractor’s license bond (in a form approved by the Contractor’s State License Board) in the amount of $15,000 ($100,000 bond required for limited liability companies) issued by an admitted surety in favor of the State of California with the registrar of the Contractor’s State License Board within 90 days of the date the bond is issued. The bond shall be issued for the benefit of the parties listed in Business and Professions Code §7071.5. In lieu of a bond, a deposit may be made pursuant to Business and Professions Code §7071.12.
- Post A Qualifying Individual’s Bond
If the qualifying individual is not the proprietor, general partner or joint licensee, a bond in the amount of $12,500 issued by an admitted surety (in a form approved by the Contractor’s State License Board) must be filed with the registrar for the Contractor’s State License Board. The only exceptions to this requirement are if the qualifying individual owns 10% or more of the voting stock or membership interest in the corporation or limited liability company.
- Obtain Insurance
Insurance also needs to be obtained, including providing proof of worker’s compensation insurance to the Contractor’s State License Board.
Please note that California’s licensing requirements are constantly changing. As such, we recommend that a contractor undertake the appropriate measures to ensure that the licensing requirements upon which it relies are current, including consulting with a knowledgeable attorney.