Change in Business Entity

A new license is required whenever the business entity changes (such as sole owner to corporation, sole owner to partnership, partnership to corporation, etc.) or when specific changes occur with the business structure. Licenses are associated with a business entity and not necessarily the qualifier. Therefore, licenses are not transferable from one business to another, even if the qualifying individual is the same for both (Business and Professions Code section 7075.1).

CSLB issues licenses to five (5) types of business entities:

  • Sole Owner
  • Partnership
  • Corporation
  • Joint Venture
  • Limited Liability Company (LLC)

Sole Owner Licenses

A sole owner license is issued to a specific individual. The license can be qualified by the Owner or an Responsible Managing Employee (RME). The license cannot be sold or transferred to another individual.

Partnership Licenses

A partnership license is issued to a specific General Partnership or Limited Partnership structure. The license can be qualified by a Qualifying Partner or Responsible Managing Employee (RME). A Qualifying Partner must be a General Partner of the partnership structure. An RME is an employee of the company, and not considered a part of the partnership structure.

General Partnership Licenses

General Partnership license consists of two or more general partners.

  • If a general partner leaves the partnership, the partnership license must be canceled.
  • If a qualifying partner leaves the partnership, the partnership license must be canceled.
  • Partners cannot be added to or deleted from a partnership license. A new license would be required for the new partnership structure.

Limited Partnership Licenses

Limited Partnership license consists of one or more general partners and one or more limited partners. A limited partner is responsible for a business only in proportion to their financial interest, and does not take part in the day-to-day operation of the business.

  • When a general partner leaves the limited partnership, the partnership license must be canceled.
  • When a qualifying partner leaves the limited partnership, the partnership license must be canceled.
  • General partners cannot be added to or deleted from a limited partnership license. A new license would be required for the new partnership structure.
  • Limited partners can be removed from a limited partnership license by completing and submitting an Application to Change Limited Partners of a Partnership. At least one limited partner must be listed on the license to continue as a limited partnership.
  • Limited partners can be added to a limited partnership license by completing and submitting an Application to Change Limited Partners of a Partnership.
  • If all limited partners leave the limited partnership, the partnership license must be canceled.

Corporate Licenses

A corporate license number is issued exclusively to a specific corporate registration number assigned by the Secretary of State's Office. If this registration number changes, a new contractor license number will be required for the new corporation. If a corporation dissolves, merges, or surrenders the right to do business in California through the Secretary of State's Office, the contractor license must be canceled.

Alert symbolIMPORTANT: You must notify CSLB of any change to your license within 90 days of the change (Business and Professions Code section 7083).

New License Required

When a change occurs in your business entity or business structure and a new license is required, you must complete and submit an Application for Original Contractor License or an Application for Original Contractor License (Exam Waived). You will be required to pay all fees, post new bond(s), and provide proof of workers' compensation insurance or file a workers' compensation exemption form for the new business.

License Reassignment

Business and Professions Code section 7075.1 (c) provides for the reassignment of a license number under certain conditions.

  • A sole owner license may be reassigned to another individual, if all of the following conditions exist.
    • The individual is an immediate family member of the licensed individual.
    • The licensed individual is deceased or absent.
    • The license is required to continue the existing (currently active and operating) family business.
    • A written request for license reassignment is submitted along with an Original Application for Contractor License and the required fees.
  • A sole owner license may be reassigned to a corporation, if all of the following conditions exist.
    • The corporation was formed by the licensed individual.
    • The licensed individual maintains ownership of at least 51 percent of the corporation.
    • A Licensed Sole Owner Applying for Corporate License form (13A-1h) must be submitted along with an Original Application for Contractor License and the required fees.
    • Once a sole owner license number is reassigned to a corporation, it cannot be changed back to a sole owner license at a later date. Once reassigned, the number will belong exclusively to the corporation.
  • A corporate license may be reassigned to a different entity, if one of the following conditions exists and the new entity is being formed to continue the business of the formerly licensed corporation. (You must submit a written request for license reassignment, specifying which condition exists, along with an Original Application for Contractor License and the required fees.)
    • The parent corporation has merged or created a subsidiary.
    • The subsidiary has merged into the parent corporation.
    • The corporation has changed its filing status with the Secretary of State's Office from a domestic corporation to a foreign corporation.
    • The corporation has changed its filing status with the Secretary of State's Office from a foreign corporation to a domestic corporation.