Facts About 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.

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.

The person who sits for and passes the licensing exam is known as a qualifying agent or simply as QA. A QA may be a permanent employee of the business, an officer or the owner. In most cases, QA are also the owners of the business. If the QA is also the owner of the business, their name must appear in the financial statements submitted during the application of the permit. Without this, the permit may be voided.

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.

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.

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.

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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