Date Published: November 18, 2016

How to Turn your Contract Work into an LLC

An LLC is defined as a Limited Liability Company, which is a term used to describe the nature of a joint proprietorship without the liability of operating a full-on corporation. In this case, an LLC conjoins the ability of two or more licensees or employees working together for profit. California’s booming construction industry makes an spectacular place to open an LLC. Members share portions of control of the business decisions as a whole, although those roles of power are predetermined and agreed upon.

There are many reasons why a California contractor may wish to enter into a Limited Liability Company. Some wish to grow their network to increase their reputations and profits. Most just wish to be protected from liability in the instance of a legal judgement and debt. Becoming an LLC is a smart choice for a contractor who oversee a lot of projects; contractors run the risk of falling into legal troubles. Forming an LLC could help protect against risks associated with the profession.

The Contractor’s State License Board governs all contractor transitions from a sole proprietorship to a Limited Liability Company. You will have to submit an application here with CSLB to get started.

Requirements listed on the application include:

  • Personnel Record: a list of all officers or personnel associated with the Company.
  • Qualifying individual:  a leader or spokesperson of your business entity.
  • Representation of good standing with the Secretary of State.
  • $1 million dollars worth of liability insurance and a $100,000 surety bond.
  • And a business name change to reflect the change of entity to an “L.L.C.”

You may read more about the application details by visiting the The Contractor’s State License Board Guide.

It is crucial to note that a contractor will still be required to maintain a bond of $15,000 for his or her own license, separate from that of an LLC Bond.

In addition to a regular license bond, a Limited Liability Company bond must be obtained and turned into the Board. The additional bond must be in the amount of $100,000. You may obtain this surety bond at a great rate by getting your bond through Surety1! Visit our application page on; an agent will give you a quote once the application is submitted online.

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