The entity is a one-way door: the license belongs to it, not to you
In one paragraph
CSLB does not license you. It licenses a business entity, and the number is not transferable to any other person or entity under any circumstances. Incorporate later and the corporation applies for its own license; take on a partner and the partnership license is canceled when that partner leaves. This lesson lays out what each entity costs at CSLB before you ever get to taxes, so you choose once.
The rule
Under B&P 7075.1(a), no license, regardless of type or classification, is transferable to any other person or entity under any circumstances. A license number may be reissued only to the same individual, or to a partnership, corporation or LLC with no change in its partners or Secretary of State registration (7075.1(b)); a change that creates a new Secretary of State registration requires a new contractor license application (CSLB).
Why it matters
Every bond, insurance certificate, contract, permit and CSLB record you build in the first year is tied to the entity. Change the entity and you start over with a new number, new bonds, a new workers' compensation certificate and a break in the license history your customers can look up. Decide the entity with the CSLB costs in front of you, not just the tax brochure.