Have you ever thought about how your contracting business today may not look the same five years from now? Maybe you currently specialize in electrical work but eventually want to expand into general building projects. Maybe you hold a B General Building license but see enough plumbing, HVAC, roofing, or other specialty work coming your way that adding another classification could make sense.
Whatever direction you’re considering, it’s smart to think about future contractor license classifications before you actually need them.
Adding a classification isn’t simply a matter of deciding you want to offer another service. The qualifying individual needs the right experience, your business and license need to meet CSLB requirements, and in many cases you’ll need to pass an additional trade examination.
Planning ahead can make that process much easier.
California contractor licenses are divided into several main categories:
Each classification has its own legally defined scope of work. Not familiar with the differences? Start with our guide to the types of contractor licenses in California.
For example, a contractor may begin with one specialty classification and later decide that another specialty better reflects additional work the company wants to perform. Or a contractor may want to expand from specialty work into qualifying general building projects. The important thing is to think beyond the work you’re doing today.
Ask yourself:
If you’re trying to decide between broader general contracting and a specific trade, our guide to General vs. Specialty Contractor Licenses in California goes into that distinction in more detail.
This is one of the biggest reasons to plan ahead. To add a classification, the qualifying individual generally needs four years of qualifying experience within the previous 10 years in the classification being requested.
CSLB recognizes qualifying experience at the journeyman level or as a foreman, supervising employee, or contractor. That means you can’t necessarily decide today that you want a new classification and qualify for it tomorrow. If you think you’ll eventually want to add a classification, start paying attention to the experience you’re gaining now.
Keep records that help establish:
CSLB can request documentation supporting the experience listed on an application. That documentation may include items such as contracts, permits, invoices, tax documents, employer records, work orders, and other records depending on how the experience was gained. You can review our guide to acceptable supporting experience documentation for examples of the types of records CSLB may request.
If some of your experience comes from independent or side work rather than a traditional employer, also read Do Side Jobs Count Toward Your CSLB Experience?.
Every classification on a contractor license needs a qualifying individual. That doesn’t necessarily mean you need a different person for every classification. The qualifier for the additional classification may be the person who’s already qualifying the license, provided that person has the required experience and meets the requirements for the new classification.
A company may also bring in another qualified individual.
Depending on the business entity, the qualifier may serve in a role such as a:
The available qualifier positions depend on the type of business entity.
If your long-term growth depends on another employee or business partner qualifying a classification, don’t wait until a major project appears before thinking through who that person will be and whether their experience actually supports the classification.
Your contractor license isn’t simply attached to the person who passed the exam. CSLB licenses are issued to specific business entities. California contractor licenses may be issued to entities including sole owners, partnerships, corporations, LLCs, and joint ventures.
This becomes important when you’re planning for growth because changing the business entity can require a new contractor license.
For example, changing from a sole ownership to a corporation isn’t simply an administrative update to the existing license. CSLB generally requires a new license when the entity changes, subject to specific rules regarding license-number reassignment.
The same issue can arise when changing between other business structures.
That doesn’t mean you should choose a corporation or LLC solely because you might add another classification later. Tax, liability, ownership, and other business considerations also matter and should be discussed with the appropriate professionals.
Your business name can also affect future expansion. CSLB doesn’t allow a contractor to use a business name that misleadingly suggests the company holds a classification it doesn’t actually have.
For example, calling your company:
ABC Roofing
could create a licensing issue if the company doesn’t hold a classification that authorizes the roofing work implied by the name. A more neutral business name may give you additional branding flexibility as the company grows. We’ve gone deeper into this in Contractors Business Name Style: Current CSLB Rules, including DBAs, corporations, LLCs, and names that suggest classifications the license doesn’t hold.
One of the worst times to start thinking about an additional contractor classification is when a valuable project is already sitting in front of you.
At that point, you may discover that:
Planning ahead gives you time to address those issues before they’re standing between you and the work you want to take.
Before starting Contractors License Guru, Phil spent five years working as a CSLB application technician. For more than 20 years since, he’s helped California contractors work through classification, qualifying experience, application, and examination issues.
Thinking about adding another classification to your license? Have the Guru review your situation and application before you submit so you can identify potential issues with your classification, qualifier, experience, or application before they create unnecessary delays.
