Information On Contractor License Classes In Los Angeles

By Clarence Tipton

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.

The law requires that a licensing test must be taken and passed by all new applicants of licenses. These tests are administered by relevant government bodies. Licenses are classified according to various criteria, but some of the common ones are Mechanical, Electrical, and Building. Several subcategories fall under the various classes of licenses. There is a fee that all people who place applications must pay to gain the permit. Location may play a role in how much one has to pay.

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.

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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