Facts About Contractor License Classes In Los Angeles

By Clarence Tipton

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.

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.

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.

There is always a classification accompanying every license issued in the US. Examples of classes include MU, HC, CMC, CE, BC, HRA, Specialties Environmental, and LMC. Class HC handles heavy construction, HRA handles highway, railroad, and airport, BC handles building, CE handles electrical, MU handles Municipal Utility while LMC handles masonry.

As a requirement for a person to place a particular bid, the job they are bidding on should cover a minimum of 60% of the class in which they hold a permit. Fortunately, a person is free to bid on a project which does not meet this threshold if it a commercial one. It is still required that every aspect of the project falling outside the area of licensing be sub-contracted to someone properly licensed in it.

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.

Since people provide financial statements, these statements are based upon to determine financial limit on the permit. It is a requirement that all financial statements provided during the application be audited and prepared by a certified public accountant. Proof of insurance is also a major requirement. Insurance policies that one needs include worker compensation insurance and general liability insurance.

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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