What To Know About Contractor License Classes In Los Angeles

By Louis Wright

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.

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.

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.

In order for one to place a certain bid, the project they bid on must cover at least 60 percent of the class in which they are licensed. However, one may be exempted to bid on projects that do not cover more than 60 percent of the field they are licensed if the project is a commercial one. In such a case, areas of the project that fall outside the area of licensing must be sub-contracted to a properly licensed entity.

The other exception to the above mentioned law is that, one may only sub-contract if the payment for the job in which they do not hold a permit is above 25000 dollars. Every US issued permit normally has monetary limit. As such, a contractor cannot take projects exceeding their limit stated on the license. Exceeding the limit is breaking the law which can attract penalties.

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.

Application of licenses entails providing a list of owners of the license. One must also disclose the history of the entity and experience in the field. Licenses take between four and six weeks to be approved or rejected. One is not allowed to bod, offer, or contract before the y receive the permit.

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