Information On Contractor License Classes In Los Angeles

By Andrea Pedigo

Owning a contractor license is important to avoid getting into trouble with the law while offering services and products to clients. Licenses are often obtained as partnerships, sole proprietors, corporations, and LLCs. The permit issued usually has the name of the entity or person whose financial statements was submitted during application. Consequently, bids must be in the name of the holder of the permit. Information about 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.

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.

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.

There is also an exception to the law stated above. The exception is that one can only sub-contract if the amount they are paid to do work in which they are not licensed exceeds 25000 dollars. All licenses issued in the United States usually have monetary limits. That means that one cannot take contracts that exceed the limit specified in the contract. Doing that amount to breaking the law and attracts a penalty.

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.

When the application is being placed, applicants are required by the law to list all owners of the license. Also, full disclosure is required as well as experience that the individual has in the field they intend to work. Approval or rejection of the application typically takes up to 6 weeks, which involves reviewing of the application placed by a board. It is considered illegal to offer, contract, or bid before receiving the approval of the permit.

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