RMO in California

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September 12, 2024

by a searcher from Yale University - School of Management in San Francisco, CA, USA

Does anyone have experience using a responsible managing officer (RMO) to qualify a business with a contractors license in California? We're in the process of getting one and would love to ask a few questions

Thanks!

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Reply by a searcher
from Biola University in North Tustin, CA, USA
Hey ^redacted‌, looking to do the same and find quite a few opinions and strategies how to do it, but in the end it seems the most straightforward and least risky approach is to hire a licensed GM type (that you trust) and give them some equity. Otherwise you risk the license holder holding you over a barrel because they know you can’t do business without them. Have found most lenders have similar opinion. This is one of the pros to franchises in spaces where licensing is required. Good luck.
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Reply by a searcher
from The University of Chicago in Sacramento, CA, USA
^redacted‌ I had to do this when I bought my company and as ^redacted‌ mentioned you can have the Seller hold the license if the bank is ok with it. My SBA lender wanted the seller to have a clean break from the business and me to own 100% (RMO requires 20% ownership). So had to go the RME route.
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