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Sole Proprietor to Inc.

Hello, we just went from Sole Proprietor to Inc. What does that do to our contracts. We have 2 active contracts. 1 General hasn't paid us since last December. The other is 3 months behind. We haven't redone any contracts yet with the current Generals. Thank you!

3 replies

Jan 17, 2022

Presumably, you transferred your license from the sole proprietorship to the corporation, or got a new license for the corporation, and the contracts are between the client and the licensed entity. As for non-payment issues, as a subcontractor, you have 30 days from recordation of a Notice of Completion (NOC) to record a lien, or 90 days after completion of the project (not just your scope of work, but the entire work of improvement) if no NOC is recorded. You must file suit within 90 days of recording the lien. Good luck.

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Jan 17, 2022

your name on the contract must match the name on the CSLB license records. Otherwise, you are out of compliance and client can make a case for disgorgement against you for being an unlicensed contractor. There are minor exceptions to the rule, but the difference between being a sole prop vs. a corporation is a big deal.

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Feb 11, 2022

Thank you!

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