Qualifiers, partners and the exit: being the RMO for another company, the 90-day clock when a qualifier leaves, and why a license cannot be sold
In one paragraph
Growth eventually puts your name on someone else's paperwork or someone else's name on yours. This lesson covers the three situations the license law regulates tightly. Serving as the qualifier for a second company: lawful only with 20 percent common ownership, a subsidiary or joint venture, or the same majority of officers, never for more than three firms in a year, and always with real supervision and control, on pain of a misdemeanor. Losing or replacing a qualifier: a 90-day clock to notify CSLB and a 90-day clock to replace, after which the license is suspended or the classification removed, with one 90-day extension in narrow cases. And the exit: no license is transferable under any circumstances, an individual's license is canceled at death with a 90-day window for the family to request a continuance, and what a buyer actually acquires when they 'buy' an electrical contracting company.
The rule
The qualifier is responsible for supervision and control of the licensee's construction operations and may qualify an additional firm only where there is at least 20 percent common ownership, a subsidiary or joint venture relationship, or the same majority of partners or officers, and for no more than three firms in any one-year period; violation is a disciplinary cause and a misdemeanor punishable by a fine of $3,000 to $5,000 and up to six months in jail (B&P 7068.1). When a qualifier disassociates, the licensee or qualifier must notify CSLB in writing within 90 days and replace the qualifier within 90 days or the license is automatically suspended or the classification removed (7068.2). A qualifier who is not the proprietor, a general partner or a joint licensee, and who owns less than 10 percent of a corporation or LLC, must file a separate $25,000 bond of qualifying individual (7071.9). No license is transferable to any other person or entity under any circumstances (7075.1(a)), and an individual license is canceled at death, with a family continuance available only on written request within 90 days (7076(a)).
Why it matters
The offers arrive around year two: a friend who wants to 'use your license' for a new company, a bigger shop that wants you as RMO for a fee, a buyer for your business, a partner who wants in. Each has a lawful version and an unlawful version that look alike from the outside, and the unlawful version is the license-renting crime from Phase 0 with your name on it. Knowing exactly what 7068.1 allows, what 7068.2's clock does, and what 7075.1 forbids is how you say yes to the right offer and no to the one that ends the license.