CSLB Issues First LLC License, But Expect Delays

CSLB logoOver the past several months I have been providing updates about the California Contractors State License Board’s (“CSLB”) implementation of legislation enacted in 2010 which finally permits contractors to be licensed as limited liability companies (“LLCs”) in California.  The legislation requires that the CSLB begin processing LLC licenses beginning January 1, 2012.

According to a press release issued today from the CSLB, the CSLB issued its first LLC license on January 19, 2012, and it has currently received 36 license applications from LLCs.  However, the CSLB notes that it has had to reject a number of license applications from LLCs, the most common reasons being that the license application does not include the LLC registration number from the California Secretary of State, and the personnel listed on the application do not match the information from the Secretary of State:

A common reason for rejection is the missing LLC registration number, which is issued by the California Secretary of State’s office (SOS).  That number must be included on page one of the application.  Companies should not submit the LLC application to CSLB until the sOs number has been issued.

Another common problem is that the personnel listed on the application do not match those reported by SOS.  The same names and number of personnel listed on the application must match all of the personnel information provided to CSLB by SOS.

The CSLB also notes that because there is currently a four-month delay at the Secretary of State in processing Statement of Information forms, and the information contained in the Statement of Information forms must match the personnel information contained in the license applications filed with the CSLB, that LLC’s should expect a four-month delay at CSLB in processing their license applications, unless they pay for expedited processing at the Secretary of State.

2 Responses to “CSLB Issues First LLC License, But Expect Delays”

  1. Laura Boyles

    Hi Garret,
    We have a Contractor who wants to withhold State Income Taxes on a job we will be doing in CA. We are a subcontractor. Our business is in Oregon and all our employees live in Oregon. We are licensed in CA. C16-496784
    The Secretary of State in California websites gives the option for Corporations and LLC’s the ability to look up and see if they are registered. However, we are a SOLE PROPRIETOR. I don’t know if we have ever registered with the SOS in CA. I have contacted them but a redirect to their website was all i could get for information. I have worked here for nine years and this is the first time i have run into this situation. The owner who has been in business here for over 20 years has seen this one time but can’t remember the outcome of that situation. Income taxes are withheld when i pay my employees here in Oregon. It doesn’t seem right that i should essentially have to pay twice. We have a lot of jobs both public and private that we do in CA. This one in question is a public works job.
    Thank you in advance for your help.

    Reply
    • Garret Murai

      Hi Laura. Unless you have an unisual contracting relationship with your contractor I don’t know why state income taxes would be withheld since I assune you are performing work as an independent contractor rather than as an employee. Also, since you’re working on a public works prioject, you arenprobably subject to prevailing wages but this is different than state income tax withholding.

      Reply

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