Are you preparing to set up your own construction company? It is imperative that you have the right structure in place. Here, our Fremont lawyer for starting a business highlights the key things to know about setting up a successful construction company in California.
Know the Licensing Requirement: CSLB Contractor’s License
To start a construction company in California, you must have the proper license. If you already have a California State License Board contractor’s license, you can start a construction company right away, regardless of whether you have any prior history owning your own business. In other words, you can start your own construction company today if you have a CSLB contractor’s license, but you have only ever worked for other employers.
We Help CSLB Contractors With their Application for an Entity License
Companies providing contractor services will need a CSLB license. Navigating the complexities of obtaining an entity license can be daunting for CSLB contractors who are preparing to start their own company. Our team can help. We are committed to simplifying the process and providing comprehensive assistance tailored to the unique needs of each contractor. With in-depth knowledge of the requirements, we ensure your application is complete and accurate. For construction companies in California, bonds are generally required. Of course, obtaining the proper insurance coverage is also incredibly important. For some types of entity licenses, workers’ compensation coverage is required even if the company has no employees.
Other Important Legal Needs for Starting a Construction Company in California
Beyond obtaining the CSLB contractor’s license and the business entity license, there are several other key considerations that you need to address when starting a construction company. Some other notable legal needs for setting up a construction business in California include:
- City business license (business permit): Most cities in California have their own regulations regarding business operations. Before you can legally run a construction company in a local area, it is essential you secured any required business license/business permit. The permit legitimizes your operations within the city.
- Legal structure for business (sole proprietorship, LLC or corporation): A construction company needs the proper legal foundation. While some construction companies are established as sole proprietorships or corporations, some entrepreneurs in the construction industry opt for a limited liability company (LLC) structure. Notably, a properly formed and operated corporation or LLC can provide owners with personal liability protection.
- Compliance with California employment laws: California has stringent employment laws designed to protect workers. As a construction company, it is crucial to understand and adhere to these laws. Notably, construction businesses should pay close attention to the regulations regarding employees and independent contractors.
- Properly drafted contracts: Contracts form the backbone of most construction projects in California. These contracts define the scope, payment terms, responsibilities, and potential liabilities among other things. CSLB also requires certain language to be included in contracts for construction services. To protect your company from future disputes and comply with CSLB, a construction company’s contracts should be drafted and/or reviewed by an attorney.
Contact Our Bay Area Business Lawyer for Construction Companies Today
Lynnette Ariathurai is an experienced, solutions-driven business lawyer. We help clients set up successful construction companies. Contact us right away for a fully confidential appointment. We provide business law services to construction companies throughout the Bay Area.