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Construction Industry Licensing Board Part IV – Qualifying Additional Business Entities
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Construction Industry Licensing Board Part IV – Qualifying Additional Business Entities

April 30, 2015 Construction Industry Legal Blog

Reading Time: 4 minutes

Many Florida contractors and license holders have a general understanding of the Florida Construction Industry Licensing Board (“CILB”), but like many quasi-judicial bodies, it can remain a mystery to those who practice and appear in front of the CILB.  This post will cover some specific information regarding applications for license holders to qualify an additional business entity.

Section 489.119, Florida Statutes, sets forth the foundation for the requirement of the license holder to qualify a business.  In Florida, the license is given to the individual and not a corporation.  As such the license holder must seek to have his/her license placed with the corporation as the qualifying agent.  In addition, the CILB has promulgated rules governing the qualification of additional business entities, specifically, 61G4-15.0024 which states:

Documentation of one or more of the following factors in an application to qualify a business entity will demonstrate to the Board, absent evidence to the contrary, that an applicant possesses the ability to properly supervise the proposed additional business entity for purposes of the application:

(1) The applicant to qualify an additional business owns 20% or more of the business to be qualified;

(2) The applicant to qualify an additional business is a W2 employee of the business to be qualified; or

(3) Other evidence of the means and methods utilized by the applicant to ensure control over the construction work of the proposed additional entity.

In order to qualify an additional business entity, you must present evidence to the CILB of supervisory ability for each business. If you own less than 50% of each business, you will be required to appear at one of the board’s monthly meetings. Such appearance at the CILB is the opportunity for the applicant or his/her lawyer to present evidence as to how the additional business entity will be supervised. While 20% ownership is the CILB rule requirement, generally the CILB wants to see that the applicate has control over the busy or at least the supervision.  Such factors to go into consideration are whether the applicant can sign contracts, bids, change orders, checks or whether the applicant has the ability to hire and fire employees. In addition, the geographical location of the companies will impact the analysis on direct supervision. Less than 50% ownership is not a bar to approval of the application, but it is a factor that is considered in whether the applicate has the ability to supervise. If the applicant is receiving payment under a 1099 or as an independent contractor, that is called “renting the license” and it is illegal.

There are some additional application requirements:

Financial/Credit: Applicants will need to provide proof of financial stability and responsibility by submitting credit reports for themselves and the business entities they wish to qualify. Credit reports must include a FICO derived credit score and indicate that local, state and federal records have been searched. If the applicant has open liens and judgments, the CILB will require satisfaction or written proof of a payment plan to satisfy the lien or judgment.
Fingerprints: An applicant must have a background check as part of the licensing process. Applicants with poor moral character will be denied.
Insurance: Applicants are required to attest that they have obtained public liability and property damage insurance in the amounts determined by CILB rule. Applicants are also required to obtain workers compensation insurance or obtain an exemption from workers compensation insurance within 30 days of issuance of their license.
Local License: In lieu of a state certification examination, applicants for registration must show evidence of possessing a certificate of competency from a local licensing office (“local comp card”), as provided for in the application.
Fee: The applicant must pay the required fee as provided in the application.

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