Do you need to update your MHIC license when you form an LLC?
Short answer. Yes. An LLC is a different legal entity, so under COMAR 09.08.01.04 it must be registered with SDAT and licensed by the MHIC with you as the qualifying individual. You cannot simply rename your existing license.
- COMAR 09.08.01.04
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
Your business is growing. You're thinking about incorporating as an LLC for liability protection. A friend says you'll need to update your MHIC license.
What's the process?
- Correct
Under COMAR 09.08.01.04, a corporation or partnership must be registered with the Maryland Department of Assessments and Taxation (SDAT) before it can be licensed by the MHIC. The qualifying individual (you) must meet all licensing requirements, and the corporate license is tied to that individual. If you leave the company, the license doesn't stay with the LLC without a new qualifying individual.
- Wrong
An LLC is a different legal entity than a sole proprietorship. You cannot simply rename your license. COMAR 09.08.01.04 requires a separate licensing process for corporations and partnerships. The LLC must be registered with SDAT, and a new MHIC application must be filed under the corporate entity. Operating under an LLC without proper MHIC licensing for that entity is a violation.
All 10 mhic licensing & renewal questions
- What should a new MHIC contractor do before the first job?
- What happens if your contractor liability insurance lapses in Maryland?
- How do you meet the MHIC financial solvency requirement at renewal?
- What does the MHIC require to renew a contractor license?
- Do you need to update your MHIC license when you form an LLC?
- Do you have to tell the MHIC when your business address changes?
- What if the MHIC lookup shows your old business name?
- Why does the MHIC review your credit report?
- Can unpaid supplier bills put your MHIC license at risk?
- How should a contractor respond to an MHIC compliance audit?