Contractors Business Name Style
Many people get caught in the contractors business name style law, or B&P Code 7059.1, and end up with a rejected contractor’s license application.
Update: Dec. 6 2019
The CSLB told an applicant that he must use a DBA with four specific words in it. They told the applicant that he could only use those four words without changes or alterations. So here we go again… the cslb crossing the line between state agency and dictatorship.
Continuing with the original post…
The contractors business name style code section states: “7059.1. Misleading or incompatible use of name styles (a) A licensee shall not use any business name that indicates the licensee is qualified to perform work in classifications other than those issued for that license, or any business name that is incompatible with the type of business entity licensed.
(b) A licensee shall not conduct business under more than one name for each license. Nothing in this section shall prevent a licensee from obtaining a business name change as otherwise provided by this chapter.”
The Contractors State License Board’s (CSLB) interpretation of this law is that your business name must be compatible with the classification you are applying for. If you are applying for a B-General Building license, your business name must have the words construction or building in it (unless you are using your personal name as the business name). So… if your corporate name, partnership name, or sole owner DBA is “My Business Rocks, Inc.” or “My Business Rocks & Sons” or “My Business Rocks, LLC”, the CSLB will require you to add a DBA that matches the classification you are applying for.
My Business Rocks Construction (B-Gen)
My Business Rocks Electrician (C-10)
My Business Rocks Plumbing (C-36)
My Business Rocks Drywall (C-9)
To give you my straight up opinion… this law is government overreach at it’s finest. If I want to name my business “My Business Rocks” I should be able to do that… without having to add a DBA (a DBA that then must be included on all contracts, advertising, etc.).
A client sent me the correction letter he received from the CSLB where the tech told him “Business name must be strictly compatible with the classification in which you are applying for, not allude to any other classification and not be too vague.” Too Vague!!?? Does someone at the CSLB have the title of “Too Vague Police”? Who determines what is too vague and what is not?!? For people like me who help applicants wade through the red tape, it makes it very difficult when CSLB techs jump ship and begin changing the laws as they wish.
You’ll notice in the law section mentioned above there is nothing that states that the business name “must be strictly compatible with the classification” being applied for. It states, “or any business name that is incompatible with the type of business entity licensed” (emphasis added) My Business Rocks, Inc. does not indicate that I’m performing work in a classification that I’m not applying for. It also doesn’t suggest that my intent is to operate as a sole owner with a corporate name.
Wouldn’t it be nice if government agencies actually followed the law as written? And wouldn’t it be nice if the CSLB techs didn’t alter or amend the contractors business name style law, or any other law, whenever they feel like it?
A current client applied for a new license (waiver) with the B-General classification and his/her corp name is X Y Solar. I informed him/her that the CSLB will ask for a DBA because the corp name didn’t include construction or building. He/she was adamant that there are other licenses out there with Solar in the name that only hold the B classification. I agree, there probably are, but CSLB business name cops are cracking the whip, and as much as he/she doesn’t want to use a DBA (i.e. X Y Construction) the CSLB won’t move the app forward until he/she provides them with one.
Also… a DBA (or FBN) filed statement from the county where the business is located must be included with the amended application. (again… nothing in the law that says the CSLB can ask for this filed FBN statement)
The CSLB created a business name style committee. This committee is reviewing questionable business names and retraining staff on the use of 7059.1. Many of the cslb techs are mis-applying that law section, and I’d like to think that I’ve helped in pointing this out to cslb management so that this can be corrected.
To reiterate: if you have a business name that does not denote construction or building or any specific trade in any way, you do not need a DBA. XYZ, Inc. would not require a DBA by the cslb. On the flip side, XYZ Contracting, Inc would need a DBA. XYZ Construction, Inc., applying for the B classification, would be an acceptable name. XYZ Roofing, Inc. would be an acceptable name for the C-39 classification… etc.
If you have a current license that has a business name that would require a DBA under today’s rules, and you convert that license to a corp or LLC and keep that business name, the cslb will not require that you provide a DBA. Basically, they’re grandfathering in old business name under certain circumstances.