California C10 Contractor Licensing Requirement
January 05, 2022
by a searcher from Northwestern University - Kellogg School of Management in Redwood City, CA, USA
Evaluating an interesting business. To participate in the industry, it requires a California C-10 license. This is basically an electrical contractors license. The employees that do the work have these license, the current owner has the license (he doesn't do the work just manages the business). Getting the license appears to be doable with one complication in that it requires a one year practical journeyman work experience.
Has anyone experienced this challenge and found creative ways to solve this?
I think it is safe to presume that this is a challenge found in other states as well.
Thank you.
from Harvard University in San Diego, CA, USA
Your options are to use the seller's license, use an employees license or hire someone with a license. You are looking for an RME or an RMO. If it is an SBA deal, it is going to depend on what the lender will allow because technically an RMO has to own 20% of the business. I did a deal recently where we were able to use the sellers license for 12 months while the new owner took his test. The business was officially sold, the seller bought back into the business at 20% ownership in order to meet the license qualification and then the buyers bought out the seller once they had their license.
Keep in mind that dealing with the CSLB is a hassle, their processing times are 2+ months and they don't look at anything until your information is complete.
from University of Pennsylvania in Miami, FL, USA
One solution is to use an employee's license for the business as a RME (or i think you can use 2 in case one of them leaves). You would need to transfer it which could take several months - you will likely want to pay an expediter. It would also help to hire an attorney skilled in this area.
https://www.cslb.ca.gov/Contractors/Applicants/Contractors_License/Exam_Application/Before_Applying_For_License.aspx