Business Structures and How They Affect the License
The form of your business changes your liability, your taxes — and, importantly for the exam, what happens to your license.
1. The five business forms CSLB licenses
CSLB issues a license to a sole owner, partnership, corporation, LLC, or joint venture.
| Form | Personal liability | Qualifier |
|---|---|---|
| Sole owner | unlimited (owner personally liable) | the owner |
| Partnership | unlimited (partners jointly liable) | a partner or RME |
| Corporation | limited | an RMO or RME |
| LLC | limited | an RMO or RME |
| Joint venture | per the JV agreement | each member is licensed |
- Corporations and LLCs give owners LIMITED personal liability; sole owners and general partners do not.
- LLC extras: beyond the $25,000 license bond, an LLC must carry $1,000,000 liability insurance and a $100,000 LLC Employee/Worker Bond.