Facts About Contractor License Classes In Los Angeles

By Gerald Herman

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.

It is a requirement by law that all new applicants for licenses sit and pass a licensing test. A government agency normally administers the test. The licenses are classified into different groups including Building, Mechanical, and Electrical licenses. All the licenses have many sub-categories under them. Every applicant has to pay a certain amount of fee, which is determined by the location the test is supposed to be takes from.

In the licensing process, the person who sits for and passes the licensing exam is referred to as the qualifying agent. Qualifying agent may be the owner of the license or an officer or full time owner of the business. It is important to note that the license does not belong to the qualifying agent, unless the qualifying agent is also the owner of the business in whose name the license was issued. That would mean that the name of the qualifying agent must also appear on the financial statements provided during the application of the permit.

Every permit issued in the US is normally assigned a classification. The classes include MU, CE, BC, HRA, HC, LMC, CMC, Specialties and Environmental among many others. Class HC stands for heavy construction, HRA deals with highway, railroad, and airport, BC for building, CE deals with electrical, MU for Municipal Utility while LMC deals with masonry.

In order for one to place a certain bid, the project they bid on must cover at least 60 percent of the class in which they are licensed. However, one may be exempted to bid on projects that do not cover more than 60 percent of the field they are licensed if the project is a commercial one. In such a case, areas of the project that fall outside the area of licensing must be sub-contracted to a properly licensed entity.

The law above also has another exemption. The exemption is that sub-contracting should only be done in cases where portions of the project in which one lacks a license exceed an amount of 25000 dollars. There is always a monetary limit placed on every permit issued in the US. Thus, it would be illegal to work on projects whose payment exceeds the monetary limit.

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.

During application the applicant must provide a list of all owners of the license. This requires that one must state the experience and history of each entity in the field. Normally, it takes about 4 to 6 weeks of reviewing before a permit is either rejected or approved. Everyone is forbidden from contracting, offering, or bidding before getting a license.

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