Business & LicensingQuestion 1431 of 1605
An RMO who owns 15% of the licensed corporation qualifies its license. Is a bond of qualifying individual required?
a.No, because the RMO owns at least 10% of the voting equity
b.Yes, always for RMOs
c.Yes, because 15% is too high
d.Only if the corporation is new
Explanation
Under B&P Code section 7071.9, the bond of qualifying individual is waived when the qualifier owns 10 percent or more of the entity's voting equity. An RMO owning 15% meets that threshold, so the bond is not required.
Law Reference: B&P Code §7071.9Practice all 1605 questions free — no signup required.
Related questions on this topic
- An original contractor's license application generally becomes void if the applicant fails to complete requirements within what period after the application is accepted?
- A contractor licensed only as Class A General Engineering is asked to remodel the interior of an existing office (a general building project). What is the proper course?
- The contractor's license bond and the bond of qualifying individual are two separate bonds. When is the bond of qualifying individual required?
- A licensee changes the business name style (for example, from 'ABC Builders' to 'ABC Construction Inc.'). What is generally required?
- A sole proprietor licensee incorporates the business. Can the new corporation keep operating under the sole proprietor's license number without action?
- Claims against the $25,000 contractor's license bond are generally handled how when total claims exceed the bond amount?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)