Running the Business · Part 6
Becoming an RMO for someone else's company: the liability you are taking on, and the only version that is lawful
Lesson 0.4 covered the offer in its crude form: a friend pays you to "put your license on" a company. By year three the offer is dressed better: a real company with real jobs, a minority ownership stake, a title, and a monthly fee, from someone who lost their qualifier or never had one. This lesson is what saying yes means in law: you are personally responsible for that company's construction operations under section 7068.1, with a misdemeanor and license discipline if you do not actually supervise; the exceptions that allow a second license at all; the bond you will owe; the disassociation rule that keeps you responsible until CSLB receives your letter; and the narrow version of the arrangement that is lawful, which involves real ownership, real supervision, and a written agreement about both.
What the full lesson covers
- A qualifier may serve a second company only under 7068.1(c): 20 percent common ownership, a subsidiary or joint venture, or the same majority of officers; and never more than three firms in a year (7068.1(b)). A monthly fee and a title do not satisfy any of them.
- Even where the exception applies, 7068.1(a) makes you personally responsible for direct supervision and control of that company's construction operations, as 16 CCR 823 defines it; failure is a misdemeanor (six months, $3,000 to $5,000) and cause for discipline against your own license.
- As an RMO owning under 10 percent, you owe a $25,000 qualifier bond in your name (7071.9); with less than 20 percent, you cannot lawfully be the second-company qualifier at all.
- When you leave, you are responsible until the later of your disassociation date or CSLB's receipt of your written notice (7068.2); send it yourself, the day you leave, with proof.
- The lawful version: genuine ownership of at least 20 percent, a written agreement that gives you authority over hiring, jobs, and compliance, a schedule of actual supervision you can document, insurance naming you, and a decision that the company's complaint history will be your license's history.
Unlock the full lesson
This is the public summary. The full lesson has the method, the worked cases, the checklists and the templates:
- All in-depth lessons, exam prep and After the License
- 1,000+ practice questions
- AI tutor (100 messages included)
- 14+ hours of audio lessons
- Full-length practice exams
- Pass guarantee
Already have an account? Sign in
More lessons in Growing the Business
- 1Hiring under AB 5: the ABC test, why a 1099 helper is a lawsuit unless they hold their own license, and the construction subcontract exemption
- 2Employees: wage and hour, overtime, meal and rest periods, final-pay rules, and the workers' compensation class code
- 3Apprentices and the Division of Apprenticeship Standards: how a small shop trains its next plumber lawfully
- 4Adding classifications: when to add the B, the C-20, or a second specialty, and how the exam waiver works
- 5Systems: field-service software, the price book, and dispatch. What to buy, when, and what it must produce
- 6KPIs: average ticket, close rate, gross margin, and the three numbers that predict failure
- 7Supply-house credit at scale, the fleet, and inventory: the second truck's paperwork and the parts on it
- 8Becoming an RMO for someone else's company: the liability you are taking on, and the only version that is lawfulYou are here
- 9Selling or stepping back: what a plumbing business is worth, what a buyer is actually buying, and what the license will and will not let you transfer
- 10Template: the hiring checklist (AB 5-safe), from the decision to the first day
- 11Template: the new-hire packet index
- 12Template: the monthly KPI sheet