The state of California recently passed new legislation making it possible for Limited Liability Companies (LLCs) to be licensed contractors in California. This is big news, as it makes it possible for more companies to do business in California as LLCs. However, there are a few requirements that your company needs to keep in mind to avoid delays and errors in getting your LLC approved for a California contractor license:
- Know your LLC registration number: If you have incorporated your contracting business, make sure to include the LLC registration number on your application to the California Contractors State License Board (CSLB). According to a recent news release from the CSLB, many contractor LLCs have been rejected for a contractor license because they did not include an LLC registration number on their applications. When you form an LLC in California, you should get an LLC registration number. If you hire CorpNet to help incorporate your business, we can manage the paperwork and deliver you all of the relevant documentation once your business is officially on file with the state.
- Make sure your application is consistent with the Secretary of State information: When you incorporate your business by forming an LLC, you have to file a Statement of Information with the California Secretary of State’s office. Part of this Statement of Information includes reporting how many employees you have and who the key personnel are within your LLC. If you want to get a California Contractors State License, your state license application needs to be consistent with what is on file at the Secretary of State’s office, for example, with the same names and number of personnel. If there are any discrepancies, this can cause a delay in getting your California state contractors’ license approved.
- Don’t delay – form an LLC: In previous years, contractors who had incorporated as LLCs were ineligible for California state contractors licenses. This restriction kept many contractors from forming an LLC. Now that the state has lifted this restriction, we expect to see more and more contractors forming LLCs and incorporating their businesses, due to the personal asset protection and other benefits of incorporating. This means that there will likely be a backlog of applications as hundreds of LLCs file for state contractor’s licenses, and hundreds of other California contractors decide to form an LLC for the first time. So if you’re a California contractor who wants to form an LLC, don’t delay. Talk to CorpNet today and we can give you a free business consultation to figure out your options for forming an LLC. Then we’ll work with you every step of the way to file the paperwork and get it done right.
CorpNet is ready to help contractors form LLCs to do business in California with a California state contractor license. Please contact CorpNet today for a free business consultation and we’ll help you navigate the process of managing your business filings.
We’ll help you understand your options to incorporate with the right business structure. We can help you incorporate as an S-Corp or form an LLC to get your business up and running. We help entrepreneurs start a business by managing the necessary business filings to incorporate a company.
Whether you want to form an LLC or S-Corporation or other corporate entity, CorpNet can help you choose a business structure with a free business consultation. If you require California business licenses or permits, we can help with that too!