Buying a Business that Requires Contractor's License (C36) in California

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by a searcher from University of California, Los Angeles
in Orange County, CA, USA

2yrs ago

Buying a Business that Requires Contractor's License (C36) in California

I've seen plenty of plumbing businesses go up for sale, but they all require a C36 license. In California, it takes 4 years of journeyman-level experience to obtain the C36 license (as with most contractor's licenses), but the SBA only allows an RMO forredactedyears.

Are there any ways around this? Would I, as the majority owner/operator, require a C36 license, or can I have someone with a minority ownership (<1%) cover this state requirement?

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reply by a professional 2yrs ago
from University of Notre Dame in New York, NY, USA

I've done a handful of these deals in CA that require a contractor's license - I'll echo a lot of what Brad said. It takes creative deal structuring and typically a requirement of the Seller to stay on in some form or fashion (either as the RMO, which requires a bond if they don't retain 20+% ownership, or an RME). Rollover equity/partial business acquisition can incentivize the Seller to do that. It's also very important whether the Seller holds the license personally or the LLC is the license holder b/c licenses may get cancelled upon a change of control. Happy to chat more about it - DM me or shoot me an email redacted

reply by a searcher 2yrs ago
from Keller Graduate School of Management of DeVry University in Berkeley, CA, USA

Back when I purchased my flooring businessredactedThe main installer had the license. I eventually became the RMO for the license. You can get a responsible employee to take the test. its not a difficult test. Then in 4 years you can take the test. if you have a board of directors (industry expert member) could serve in that capacity for the time being.