Facts About Contractor License Classes In Los Angeles

By Gwendolyn Johnson

Contractor licenses are important because they allow individuals and entities to provide services and products to customers without breaking the law. Licenses are usually obtained as Sole proprietors, corporations, partnerships, or LLCs. Usually, they are issued in the name of the person who owns the business and whose name appears on the financial statements. That means that all business bids must be placed in the exact name that appear on the license. This is worth knowing regarding Contractors State License Center.

New applicants for licenses are usually required by law to take and pass a licensing exam. The exam is usually administered by a government agency. There are classifications in the licenses, which include Mechanical, Electrical, and Building licenses. Each license has several sub-categories under it. All applicants are required to pay a certain fee, which depends on the location the exam is being taken.

Candidates who sit and pass the test are known as qualifying agents as per the requirement of the licensing process. A qualifying agent can be anyone including the owner of the business, an officer, or simply the owner of the license. It is worth noting that the owner of the business must also be the qualifying agent if the permit was issued in their name, failure to which the permit becomes void. As such, the name of qualifying agent should also be on financial statements submitted during application for the license.

All licenses issued in the United States are usually assigned a classification. Usually, there are several classes of licenses, including BC, CE, CMC, HC, HRA, LMC, MU, Environmental, and Specialties. Class BC deals with building, CE deals with electrical, HC deals with heavy construction, HRA deals with highway, railroad, and airport, LMC deals with masonry, and MU deals with Municipal Utility.

It is a requirement by the law to only bid on projects lie within a certain license class by over 60 percent. However, one may only neglect this rule if the project is a commercial one. Even with that, portions of such commercial projects that fall outside the license one holds must be sub-contracted to another entity that is properly licensed.

The other exception to the above mentioned law is that, one may only sub-contract if the payment for the job in which they do not hold a permit is above 25000 dollars. Every US issued permit normally has monetary limit. As such, a contractor cannot take projects exceeding their limit stated on the license. Exceeding the limit is breaking the law which can attract penalties.

The financial limit placed on licenses is usually dependent on the financial statement submitted during the application process. Such financial statements must be prepared by a certified public accountant. Besides that, applicants must provide proof of insurance. Worker compensation and general liability are the two insurance policies needed.

Application of licenses entails providing a list of owners of the license. One must also disclose the history of the entity and experience in the field. Licenses take between four and six weeks to be approved or rejected. One is not allowed to bod, offer, or contract before the y receive the permit.

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