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What You Should Know About Inactivating Your Contractors License

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Are you an active California contractor considering placing your business on hold? For various reasons you may find yourself making the decision to suspend operations. If so, you may be considering what you should do about your license. Contractors can inactivate their license with the Contractors State License Board (CSLB) at any time as long as the license is currently renewed. Better to say “active” instead of “renewed”? There is no fee to inactivate a CSLB license.

Here are some important tips about inactivating a CSLB license and information on how to reactivate an inactive license.

What an Inactive License Means

When a license is inactive, it is basically considered “on hold”. While inactive contractors do not have to maintain a bond or workers' compensation insurance coverage, and no qualifying individual is required (not sure what is meant here). The business must maintain an active mailing address while the license is inactive. While the license is inactive, the contractor is prohibited from doing any contracting work and cannot bid on jobs.

How to Inactivate Your Contractors License               

To inactivate your license, a completed “Application to Inactivate Contractor’s License” must be submitted to the CSLB. The form can be downloaded from the CSLB website or one can be requested by calling (800) 321-CSLB (2752). The owner, a partner, or a corporate officer must sign the application. In cases where the license is a joint venture, one of the members of the joint venture must sign the form.

Along with the application, the contractor’s current pocket license must also be returned. If the current pocket form is lost, a $12 replacement fee must be sent with the application. Payment can be made by submitting a money order or personal, business, or cashier’s check, but not cash.

Once the application and any related fees have been submitted to the CSLB, you can verify the status of the application by checking your licensing information on the CSLB website or by calling the agency.

The licensee may keep the license in inactive status indefinitely, as long as the renewal applications and related fees are submitted each renewal period. The CSLB will continue to send informational bulletins to help the inactive business keep up with industry updates. And every four years, the CSLB will mail a renewal application to the address on file, so it is important to keep the CSLB updated with any address changes. The CSLB allows businesses 90 days to notify them of any change of address.

Reactivating Your License

Reactivating an inactive CSLB license requires a bond and proof of workers’ compensation insurance. Contractors that don’t have any employees working for them are exempt from workers’ compensation insurance requirements but they must file a certification of exemption. Only the owner, partner, officer, member, or manager may file an exemption.

Contractors that are ready to reactivate their license can contact the CSLB for an application. All qualifying partners, responsible managing employees, and responsible managing officers must sign the application.

After the reactivation application has been processed and fees paid, the license will be active for a full two years from the end of the month in which it was reactivated.

For more information, contact the CSLB and make sure to follow BCA on Facebook.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.