Business Organization and Licensing

Introduction

Everything else in California contractor law starts here. Before a bond matters, before a contract binds anyone, before a lien can be filed, one question has to be answered: is this person legally a contractor, and are they licensed to do the work? Section 1 is where the exam builds that foundation, and roughly one question in eight comes from it.

The material is mostly memorization, which makes it some of the most reliable points on the test — if you learn the current numbers. That is the catch. More figures changed in this section recently than in almost any other, and the changes run directly against what older study guides (and stale memory) say. The minimum job size that triggers a license is now $1,000, not the $500 that appears everywhere in outdated material. The contractor's bond is $25,000, not $15,000. License fees were rewritten effective January 1, 2026. A candidate who studies the right values here banks easy points; one who trusts old numbers loses them.

This chapter walks through what legally counts as a contractor and who must be licensed, then the license classifications and the limits they impose, the qualifying individual who stands behind every license, the four bonds the license law requires, the choice of business structure, and finally the advertising and consumer-notice rules that tie licensing back to the public. Wherever a dollar figure or deadline appears, it reflects law in force today.

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Learning objectives

After working through this chapter you should be able to:

• State the legal definition of a "contractor" and explain why it reaches specialty trades, subcontractors, and hourly workers, not just "general contractors" (B&P §§7025–7026).
• Explain that contracting without a required license is a misdemeanor, and that an unlicensed contractor generally cannot sue to collect and may have to refund money already paid (B&P §7028).
• Apply the minor-work exemption — no license needed when the whole job is under $1,000 in combined labor and materials — and know you cannot split a larger job to fit under it (B&P §7048).
• Distinguish the license classifications: Class A (general engineering), Class B (general building), B-2 (residential remodeling), and C specialty trades, including the "two unrelated trades" rule for a B (B&P §§7055–7059).
• Explain how a contractor may lawfully handle work outside their classification — subcontract it, or keep it "incidental and supplemental" (B&P §7059).
• Describe the role of the qualifying individual (sole owner, RMO, or RME) and the current bona fide employee / actively engaged standard: at least 32 hours per week or 80% of the business's operating hours (B&P §§7068, 7068.1).
• State the four license-law bond amounts: $25,000 contractor's license bond, $25,000 qualifier's bond, $100,000 LLC worker bond, and the LLC's $1M–$5M liability insurance (B&P §§7071.6, 7071.9, 7071.6.5, 7071.19).
• Compare the business structures — sole proprietor, partnership, corporation, LLC — and know the license is issued to the entity.
• Apply the current advertising rules and the mandatory CSLB consumer notice (B&P §§7027.1, 7027.2, 7030, 7030.5).

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Part A — Who is a contractor, and who must be licensed

What legally counts as a "contractor"

The starting definition is deliberately broad. Under California law a contractor is anyone who, for others, builds, alters, repairs, adds to, or improves a building, road, or other structure — or who submits a bid to do so (B&P §§7025, 7026). The breadth is the point. It does not matter whether you are paid a lump sum, an hourly rate, or through a markup on materials; it does not matter whether you call yourself a "general contractor," a "handyman," or a "specialty trade." If the work improves real property and it is done for someone else, you are acting as a contractor, and you generally need a license.

Two misconceptions trip candidates here. The first is that only "general contractors" are contractors — in fact specialty trades and subcontractors are equally covered. The second is that being paid by the hour rather than by the project somehow takes you outside the definition. It does not; the method of payment is irrelevant.

Why does this matter so much? Because almost every other rule on the exam — licensing, bonds, contracts, liens — only switches on once a person is legally a "contractor." Get the definition wrong and you will mislabel handymen, maintenance workers, and material suppliers all the way through the test.

California example. A homeowner in Bakersfield hires a worker at $45 an hour to reframe and re-tile a bathroom. The worker insists he is "just labor, paid hourly, not a contractor." The law disagrees: he is repairing and improving a structure for another, so he is acting as a contractor and needs the appropriate license, hourly pay notwithstanding.

The license requirement and unlicensed contracting as a misdemeanor

The core consumer-protection rule of the entire license law is short: you must hold a valid CSLB license before you contract for, bid on, or perform work that requires one. Contracting without that license is a misdemeanor (B&P §7028), and penalties escalate for repeat offenses and for unlicensed work performed in a declared disaster area.

The civil consequence is even more powerful than the criminal one, and the exam leans on it. An unlicensed contractor generally cannot use the courts to collect payment for the work — no matter how well the job was done or how clearly the customer agreed to pay. Worse, a customer can sometimes recover money already paid to an unlicensed contractor. So the two ideas to hold together are: unlicensed contracting is a crime, and it forfeits the right to be paid.

Do not fall for the two traps. It is not true that an unlicensed contractor can still sue "as long as the work was good" — generally they cannot. And a first offense is not merely a fine with no criminal label; it is classified as a misdemeanor.

California example. An unlicensed operator completes a $28,000 deck-and-patio project in Riverside. The homeowner refuses to pay. When the operator sues, the court dismisses the claim: an unlicensed contractor has no standing to collect for work requiring a license — and the homeowner may even be able to recover amounts already paid.

The minor-work exemption — the $1,000 threshold

Not every small job requires a license. A license is not required where the total contract price for labor and materials combined is less than $1,000, provided all of §7048's conditions are met: the work is genuinely casual or minor, it does not require a building permit, the person does not employ others to perform or assist with the work, and the person does not hold themselves out as a contractor (B&P §7048(a),(c)).

Three details decide the exam questions. First, the threshold is measured on the whole project, labor plus materials — not labor alone. Second, you cannot split one larger job into several sub-$1,000 contracts to dodge the requirement; a $3,000 job is a $3,000 job even if written as three papers. Third — and this is the single most important number in the section — the current figure is $1,000, raised from the old $500 that still appears throughout stale study material.

That change is recent and worth pinning down. AB 2622 (Stats. 2024, Ch. 240) raised the threshold from $500 to $1,000 effective January 1, 2025, and AB 1170 (Stats. 2025, Ch. 67) re-enacted §7048 at $1,000 effective January 1, 2026. Any source citing "$500" is out of date. This same $1,000 figure also controls when an unlicensed person may advertise (Part F), so it is worth memorizing once and using twice.

California example. A homeowner wants a single fence-repair job done for $950 total — labor and materials combined. Because the whole job is under $1,000 and the work is minor, no license is required, so long as the worker does not advertise or present themselves as licensed. Bump the same job to $1,050, or discover it is really one phase of a larger $3,000 project, and a license is required.

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Part B — License classifications and their limits

The classifications: A, B, B-2, and C specialty

CSLB does not issue one all-purpose license; it issues licenses by classification, and you may only contract for and perform work within the classifications you hold (B&P §§7055–7059; Cal. Code Regs. tit. 16, §872).

• Class A — General Engineering. Fixed works requiring specialized engineering knowledge: roads, bridges, dams, pipelines, and utilities (§7056).
• Class B — General Building. Structures that require at least two unrelated trades. The important exception: a B may take a project involving only framing or carpentry on its own. Otherwise the two-unrelated-trades condition is what defines a general building job (§7057).
• B-2 — Residential Remodeling. A newer classification tailored to residential remodel work, sitting between the general building license and single-trade specialties.
• Class C — Specialty. Single-trade licenses, each limited to its own craft — for example C-10 electrical, C-36 plumbing, C-20 HVAC (§7058). A specialty contractor works within its trade, not across trades.

The high-yield idea, and a frequent exam target, is the two-unrelated-trades rule for a B license, paired with the fact that C classes are single-trade. A Class B general building license does not license you to take just any single-trade job, and a specialty contractor cannot wander outside its trade simply because the other work happens to be on the same project.

California example. A developer needs a highway on-ramp built — grading, paving, drainage. That is Class A general engineering work, not general building. Separately, a company holding only a C-36 plumbing license cannot self-perform the electrical rough-in on a remodel just because its crew is already on site; electrical is a different trade requiring a C-10.

Working outside your classification and subletting work

A contractor will often win a prime contract that includes work outside their own classification. The law provides exactly two compliant ways to handle it (B&P §7059; Cal. Code Regs. tit. 16, §872): subcontract the out-of-class portion to an appropriately licensed contractor, or perform it only if it is incidental and supplemental to the work of your own classification. What you may not do is simply self-perform trades you are not licensed for.

This is why a general building contractor assembles a team of licensed specialty subs rather than doing every trade in-house — and it is the mechanism that keeps a multi-trade project compliant. Watch the two traps: holding a general license does not let you self-perform every specialty trade on the job, and "incidental and supplemental" is a narrow allowance — it does not authorize a large volume of unrelated-trade work dressed up as incidental.

California example. A Class B general building contractor is building a custom home and the job includes electrical work the company is not classified for. The compliant move is to subcontract the electrical to a licensed C-10. Running the wiring with its own unlicensed-for-that-trade crew would violate §7059 — unless the electrical were genuinely minor, incidental, and supplemental to the framing and building work, which a full-house rough-in is not.

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Part C — Qualifying the license: the exam and the qualifying individual

Every license must stand behind a real, examined person. That person is the qualifying individual, and understanding the role — plus the anti-sham rules around it — is a reliable source of exam points.

To obtain a license, the qualifying individual must pass the trade and law examinations and must be responsible for supervising the licensee's construction operations (B&P §§7065, 7068; Cal. Code Regs. tit. 16, §823). Depending on the entity, the qualifier can be:

• a sole owner who qualifies their own license;
• a Responsible Managing Officer (RMO) — an officer of a corporation;
• a Responsible Managing Employee (RME) — a bona fide employee; or
• a qualifying partner or manager, depending on the entity form.

The crucial modern rule is that a qualifier cannot be a "paper" name who merely lends a license number. An RME in particular must be a bona fide employee actively engaged in the business — roughly at least 32 hours per week, or 80% of the business's total operating hours, whichever is less (B&P §§7068, 7068.1). This standard was clarified by AB 830 (Stats. 2021, Ch. 376), effective January 1, 2022, and it remains current. A qualifier also cannot freely qualify multiple firms at once except in narrow ownership situations.

The two misconceptions to bury: that a qualifier can lend their license number without real involvement (they cannot), and that one person can qualify many unrelated companies simultaneously (they generally cannot). The "actively engaged / bona fide employee" standard is a classic trap answer.

California example. A newly formed corporation pays an experienced license holder a small monthly fee to list him as its RME, though he never sets foot on a job and works elsewhere full time. This is an unlawful "paper" qualifier: an RME must be a bona fide employee actively engaged at least 32 hours a week or 80% of the firm's operating hours. The arrangement exposes both parties to discipline.

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Part D — The four bonds of the license law

Bond amounts are prime memorization items, and the exam deliberately tests whether candidates can keep four different bonds straight — each with a different amount and a different trigger. Learn them as a set.

The contractor's license bond — $25,000

Every active license must maintain a contractor's license bond, currently $25,000, filed with CSLB (B&P §7071.6). Understand what it is and is not. The bond protects certain consumers, employees, and subcontractors from specified violations of the license law — it is not liability insurance, and it is not a fund the contractor can draw on. When the surety pays a valid claim, the contractor must reimburse the surety. That three-party structure (principal, surety, and the protected public) is the difference between a bond and insurance, and it is tested.

The amount changed recently: SB 607 (Stats. 2021, Ch. 367) raised it from $15,000 to $25,000, effective January 1, 2023. Any material listing "$15,000" is outdated.

California example. A licensed contractor commits a license-law violation that harms a homeowner, who collects $10,000 from the contractor's license bond. That payout is not a benefit to the contractor — the surety now looks to the contractor to repay the $10,000, and the contractor must restore the bond to keep the license active.

The bond of the qualifying individual — $25,000

A separate bond of the qualifying individual, currently $25,000, is required unless the qualifier is the proprietor, a general partner, or owns at least 10% of the voting stock (RMO) or membership interest (LLC) (B&P §7071.9). In other words, a non-owner or small-stake RMO/RME triggers the bond, while a qualifier who owns 10% or more is exempt — the tested line is the 10% ownership stake, not "majority" ownership. The logic: a qualifier with little ownership has less at risk in the firm's compliance, so the law demands an additional bond. This figure also rose in step with the license bond under SB 607 (from a legacy $12,500) and is in addition to, not a replacement for, the contractor's license bond.

Two traps: not every license needs the qualifier's bond — it is triggered only in the specified RMO/ownership situations — and when required, it does not substitute for the main license bond.

LLC bonds and insurance — $100,000 worker bond and $1M liability

A limited liability company applying for a contractor license carries extra requirements beyond the standard license bond (B&P §§7065.1, 7071.6.5, 7071.19). It must file a separate $100,000 LLC employee/worker bond, which protects the LLC's workers for unpaid wages and fringe benefits — not consumers. And it must carry liability insurance of at least $1,000,000, scaling upward with the number of LLC members up to a $5,000,000 maximum. These exist because the LLC form limits the members' personal liability, so the state requires additional financial protection for workers and the public.

The distinct figures matter: the $100,000 worker bond is not the $25,000 license bond, and an LLC needs both. And the $100,000 bond protects the LLC's own workers, not its customers.

California example. A four-member LLC applies for a Class B license. Beyond the $25,000 license bond every licensee posts, it must file the $100,000 LLC worker bond and carry at least $1,000,000 in liability insurance (more as the membership grows). If it later fails to pay wages, its workers can claim against that $100,000 bond.

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Part E — Company organization: choosing a business structure

Sole proprietor, partnership, corporation, LLC

A contracting business can be organized as a sole proprietorship, a general or limited partnership, a corporation, or an LLC, and the choice drives personal liability, taxation, and how the license is qualified (B&P §§7065, 7071.6.5).

• A sole proprietor has unlimited personal liability for business debts but the simplest taxes and setup.
• Partnerships spread ownership but, for general partners, also spread personal liability.
• Corporations and LLCs limit owners' personal liability, but cost more to form, owe annual state minimum taxes/fees, and — for LLCs — trigger the extra CSLB worker bond and liability insurance covered in Part D.

The rule the exam most wants here: the license is issued to the specific entity, not to a person floating between entities. So a sole proprietor who incorporates cannot simply carry the old license into the corporation — changing entity form generally requires a new or reissued license. Do not assume a license moves freely between a sole proprietorship and a corporation, and do not assume an LLC and a corporation have identical CSLB requirements; the LLC has extra bond and insurance obligations.

California example. A successful sole proprietor in San Jose incorporates to limit personal liability. He assumes his existing license simply follows him. It does not — the license belonged to the sole proprietorship (the individual), so the new corporation must obtain its own license, with its own qualifier on record.

License application and renewal fees

CSLB charges statutory fees to apply for and renew a license, and these were updated by SB 861 (Stats. 2025, Ch. 592), effective January 1, 2026 (B&P §7137). Under current law:

• Original application (single classification): $450 (the statute lets CSLB raise it up to $563).
• Active-license renewal: $450 (cap $563).
• Inactive-license renewal: $300 (cap $375).

Active licenses renew on a two-year cycle, not annually. Because the schedule changed recently, older study material quotes lower amounts; use the current figures. Two traps: renewal is biennial, not annual, and the fee schedule did change recently.

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Part F — Advertising and subcontracting; the consumer notice

Advertising rules and unlicensed-advertising limits

Advertising is where licensing meets the public, and the rules are specific (B&P §§7027.1, 7027.2, 7030.5; Cal. Code Regs. tit. 16, §861). A licensed contractor must include their license number in all advertising — business cards, truck signage, websites, and printed and online ads alike. Leaving the number off, or advertising for work outside your classification, is a violation.

An unlicensed person faces a tighter rule. They may advertise only for work that does not require a license — that is, minor jobs under the current $1,000 threshold — and any such ad must clearly state that the advertiser is not a licensed contractor. (The unlicensed-advertising ceiling in §7027.2 tracks the §7048 minor-work figure, so it moved from $500 to $1,000 along with it.) The two traps: the license number is not optional on small ads or vehicle signage, and an unlicensed person cannot advertise freely just because each job stays small — they must also disclose that they are unlicensed.

California example. A licensed contractor runs a Facebook ad for kitchen remodels but omits his license number — a violation, even online. Separately, an unlicensed handyman advertises "small repairs, under $1,000": to be lawful, every such ad must state plainly that he is not a licensed contractor, and he must keep each job genuinely under the threshold.

The required consumer notice

Finally, contractors must give consumers a required notice stating that the contractor is licensed and regulated by CSLB, explaining how to check a license and file a complaint, and providing information about the contractor's bond (B&P §7030). This disclosure appears in home-improvement and residential contracts, and it exists so consumers can verify licensure and pursue remedies.

It is a mandated element, not optional boilerplate. Omitting it is a documentation defect that can undermine a contract's enforceability and expose the contractor to discipline — and a verbal assurance of licensure does not satisfy the written-notice requirement. This notice is the bridge from Section 1 (licensing) into Section 5 (contracts), where the same §7030 disclosure reappears.

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Key numbers & deadlines

Minor-work exemption (no license required): total job under $1,000 (labor and materials), truly minor, no building permit required, the person employs no one else to do the work, and does not hold out as a contractor (B&P §7048(a),(c)). $1,000, not $500 — AB 2622 (eff. 1/1/2025), re-enacted by AB 1170 (eff. 1/1/2026). Cannot split a larger job to fit.

Unlicensed contracting: a misdemeanor; the unlicensed contractor generally cannot sue to collect and may have to refund payments (B&P §7028).

Contractor's license bond: $25,000 (B&P §7071.6). Raised from $15,000 by SB 607, eff. 1/1/2023.

Bond of qualifying individual: $25,000, required in specified RMO/non-owner situations (B&P §7071.9).

LLC worker/employee bond: $100,000 (B&P §7071.6.5). LLC liability insurance: $1,000,000–$5,000,000, scaling with membership (B&P §7071.19).

Qualifier / RME standard: bona fide employee actively engaged ≥ 32 hours/week or 80% of the business's operating hours, whichever is less (B&P §§7068, 7068.1; AB 830, eff. 1/1/2022).

License fees (SB 861, eff. 1/1/2026): original application $450 (cap $563); active renewal $450 (cap $563); inactive renewal $300 (cap $375) (B&P §7137). Active licenses renew every 2 years.

Classifications: A = general engineering; B = general building (two unrelated trades, framing/carpentry excepted); B-2 = residential remodeling; C = single-trade specialty (B&P §§7055–7059).

Advertising: licensees must show the license number on all ads; unlicensed persons may advertise only for under-$1,000 work and must state they are not licensed (B&P §§7027.1, 7027.2).

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Summary

Section 1 lays the groundwork for the whole exam by settling two questions: who is a contractor, and who must be licensed. The definition is broad — anyone who builds, alters, repairs, or improves a structure for others, or bids to, regardless of how they are paid (B&P §§7025–7026) — so specialty trades, subcontractors, and hourly workers are all captured. Contracting without a required license is a misdemeanor, and the unlicensed contractor generally cannot collect and may have to refund (B&P §7028). The one exemption is genuinely minor work under $1,000, combined labor and materials, with no splitting allowed (B&P §7048) — and $1,000, not the stale $500, is the figure that earns the point.

The rest of the section is structure and numbers. Licenses come in classifications — A engineering, B building (two unrelated trades), B-2 residential remodeling, and C single-trade specialties — and a contractor stays inside them, subcontracting out-of-class work or keeping it incidental (§§7055–7059). Every license stands behind an examined qualifying individual who must be genuinely, actively engaged (≥32 hrs/week or 80% of operating hours), never a paper name (§§7068, 7068.1). Four bonds must be kept apart: the $25,000 license bond, the $25,000 qualifier's bond, the $100,000 LLC worker bond, and the LLC's $1M–$5M liability insurance (§§7071.6, 7071.9, 7071.6.5, 7071.19). The business structure chosen — sole proprietor, partnership, corporation, or LLC — sets personal liability and tax cost, and the license belongs to the entity. Finally, advertising must carry the license number (or, for the unlicensed, disclose the lack of one and stay under $1,000), and the mandatory CSLB consumer notice (§7030) hands the section off to the contracts material in Section 5.

Key takeaways

• "Contractor" is broad. Anyone who builds, alters, repairs, or improves a structure for others — or bids to — is a contractor, whether paid hourly, by the job, or by markup (B&P §§7025–7026).
• No license = misdemeanor + no pay. Unlicensed contracting is a crime, the contractor generally cannot sue to collect, and may have to refund money already paid (B&P §7028).
• Minor-work exemption is $1,000, not $500. Under $1,000 total (labor plus materials), truly minor, no job-splitting (B&P §7048).
• Know the classifications. A = engineering; B = two unrelated trades (framing/carpentry excepted); B-2 = residential remodeling; C = single trade only (B&P §§7055–7059).
• Handle out-of-class work correctly. Subcontract it to a licensed contractor, or keep it incidental and supplemental — never self-perform a trade you aren't licensed for (B&P §7059).
• The qualifier must be real. An RME must be a bona fide employee actively engaged ≥32 hrs/week or 80% of operating hours — no paper qualifiers (B&P §§7068, 7068.1).
• Four bonds, four amounts: $25,000 license bond · $25,000 qualifier's bond · $100,000 LLC worker bond · $1M–$5M LLC liability insurance. A bond protects the public and the contractor must repay the surety — it is not insurance.
• The license belongs to the entity. Changing from sole proprietor to corporation or LLC generally requires a new or reissued license; an LLC carries extra bond/insurance obligations (B&P §§7065, 7071.6.5).
• Current fees (eff. 1/1/2026): $450 application, $450 active renewal, $300 inactive renewal; active licenses renew every two years (B&P §7137).
• Advertising rules bite. Licensees show the license number on every ad; unlicensed advertisers must disclose they're not licensed and stay under $1,000 (B&P §§7027.1, 7027.2). The CSLB consumer notice is mandatory, not optional (B&P §7030).

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Sources

Official California primary law, cited to the Legislative Information site (leginfo.legislature.ca.gov) and the CSLB Law Book. Statutory figures reflect law in force as of the 2026 edition; recently amended provisions are flagged with their enacting bill and effective date.

• Cal. Bus. & Prof. Code § 7025; § 7026 — definition of "contractor."
• Cal. Bus. & Prof. Code § 7028 — unlicensed contracting as a misdemeanor; bar on suing to collect.
• Cal. Bus. & Prof. Code § 7048 — minor-work / small-operations exemption (under $1,000, labor and materials combined; raised from $500 by AB 2622, Stats. 2024, Ch. 240, eff. 1/1/2025, re-enacted by AB 1170, Stats. 2025, Ch. 67, eff. 1/1/2026).
• Cal. Bus. & Prof. Code §§ 7055–7059 — license classifications (A general engineering, B general building, C specialty) and the rule limiting and subletting work outside a classification (§7059).
• Cal. Bus. & Prof. Code § 7065; § 7065.1 — issuance of licenses by entity; LLC licensure requirements.
• Cal. Bus. & Prof. Code § 7068; § 7068.1 — the qualifying individual (RMO/RME); bona fide employee "actively engaged" standard (≥32 hrs/week or 80% of operating hours) (AB 830, Stats. 2021, Ch. 376, eff. 1/1/2022).
• Cal. Bus. & Prof. Code § 7071.6 — contractor's license bond ($25,000; raised from $15,000 by SB 607, Stats. 2021, Ch. 367, eff. 1/1/2023).
• Cal. Bus. & Prof. Code § 7071.9 — bond of the qualifying individual ($25,000).
• Cal. Bus. & Prof. Code § 7071.6.5 — LLC employee/worker bond ($100,000).
• Cal. Bus. & Prof. Code § 7071.19 — LLC liability insurance ($1,000,000–$5,000,000, scaling with membership).
• Cal. Bus. & Prof. Code § 7137 — license application and renewal fees (original $450 / cap $563; active renewal $450 / cap $563; inactive renewal $300 / cap $375; amended by SB 861, Stats. 2025, Ch. 592, eff. 1/1/2026).
• Cal. Bus. & Prof. Code § 7027.1; § 7027.2; § 7030.5 — advertising must include the license number; limits and disclosure for unlicensed advertising (ceiling tracks the §7048 $1,000 figure).
• Cal. Bus. & Prof. Code § 7030 — mandatory consumer notice (CSLB regulation, license/bond, and complaint information).
• Cal. Code Regs. tit. 16, § 823 — qualifier (RMO/RME) duties and written statement of responsibility.
• Cal. Code Regs. tit. 16, § 861 — advertising regulations.
• Cal. Code Regs. tit. 16, § 872 — classification descriptions and limitations.
• CSLB, California Contractors License Law & Reference Book (2026 ed.) — reprints B&P Code Chapter 9 and CSLB regulations (CCR Title 16, Div. 8) with commentary.
• CSLB, Law and Business Study Guide — official exam content outline (Section 1: Business Organization and Licensing; subtopics: company organization, licensing requirements, advertising and subcontracting).

The business-structure comparison in Part E (sole proprietor, partnership, corporation, LLC) draws on the Corporations Code and general entity-tax principles as background; the CSLB-specific consequences — that the license is issued to the entity and that an LLC carries extra bond and insurance obligations — rest on the B&P Code sections cited above.