Understanding the Types of
Contractor Licenses in California
Discover the different types of contractor licenses and entities in California. Learn what’s best for your business and how to get started.
Sole Ownership
🠞 Description: A simple and common choice for independent contractors, often referred to as a personal license.
🠞 Benefits: Easy setup and straightforward operations.
🠞 Considerations: Personal assets are not protected, and only the owner and a Responsible Managing Employee (RME) can be listed on the license.
Corporation
🠞 Description: A popular option for contractors seeking to protect their personal assets.
🠞 Benefits: Allows personnel changes (add, remove, or replace officers) and provides liability protection.
🠞 Requirements:
Active status with the Secretary of State
$15,000 contractor bond
Workers’ Compensation insurance or exemption
Limited Liability Company (LLC)
🠞 Description: Offers the same protections as a corporation with additional requirements.
🠞 Benefits: Liability protection and flexibility with personnel changes.
🠞 Requirements:
$100,000 LLC surety bond
General liability insurance
Compliance with corporate standards
🠞 Considerations: Higher costs due to required bonds and insurance.
Partnership
🠞 Description: A license for entities where two or more partners share ownership.
🠞 Benefits: Simple structure for collaborative businesses.
🠞 Considerations: Limited flexibility—any changes to personnel cancel the license. Protect your future by qualifying for a personal license before the partnership dissolves.
Joint Venture
🠞 Description: A temporary license issued between two existing licensed entities for specific projects.
🠞 Benefits: Quick setup with no fingerprinting requirement.
🠞 Considerations: No work experience credit is granted, making it suitable for short-term projects.
FAQs
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It depends on your business structure, goals, and liability concerns. Contact us for personalized advice.
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Costs vary depending on the entity type, required bonds, and insurance policies. We can provide a detailed breakdown.
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Yes, but the process depends on your current license type and the new entity you wish to establish.
Get Expert Help With Contractor Licenses in California
Choosing the right license doesn’t have to be overwhelming. Let us guide you through the process with expertise and personalized support. Call us today for a free consultation.