If the sole owner of a construction business dies, what happens to the business and the contractor's license?

If the sole owner of a construction business dies, what happens to the business and the contractor's license?

• A. The business continues and the license remains active
• B. The business is terminated and the contractor's license cancelled
• C. The business is sold and the license transferred
• D. The license becomes inactive but the business continues

Answer: (B)

The key idea here is that a license for a sole proprietorship is personal and not transferable. In a sole-owned construction business, there isn’t a separate, continuing legal entity to carry on the license if the owner dies. When the sole owner dies, there’s no qualifying person left to hold or supervise the license, so the license cannot remain active. The state requires cancellation of the license and the business generally must be terminated unless a new, properly qualified owner or entity requalifies and applies for a license. If someone else wants to continue the work, they would need to form a new business and obtain a license under their own qualifications; the existing license does not simply pass to heirs or survive the death of the owner.

The key idea here is that a license for a sole proprietorship is personal and not transferable. In a sole-owned construction business, there isn’t a separate, continuing legal entity to carry on the license if the owner dies. When the sole owner dies, there’s no qualifying person left to hold or supervise the license, so the license cannot remain active. The state requires cancellation of the license and the business generally must be terminated unless a new, properly qualified owner or entity requalifies and applies for a license.

If someone else wants to continue the work, they would need to form a new business and obtain a license under their own qualifications; the existing license does not simply pass to heirs or survive the death of the owner.