As an attorney, have you ever had a client who was looking to start a new business ask you about a License Bond? As a potential small business owner have you ever had to procure a license bond and not known what in the world that would entail?
The bond experts at Jurisco will try to answer all of these questions. First of all, a license bond (also known as a business bond or permit bonds) is an integral part of regulated state commerce. And, in most cases, the license bond (or business bond) is used as a consumer protection mechanism; for instance that products for sale will be not be misrepresented or that prepaid fees will be guaranteed. In California, for example, in California operators of a Dance Studio must post (up to) a $25,000 surety license bond with the secretary of state’s office. This precautionary business bond protects consumers and safeguards their prepaid fees. (See link for a list of business bonds on the California Secretary of State website: SoS license bond list)
The Jurisco bond article team would also be remiss if they explain that requirements often change for license bonding. As this type of surety bond is a precautionary safeguard, the scope of damages they are protecting against may change over time. This is best evidenced by a statutory recently enacted by the California Assembly. The bill, which went into effect on New Year's Day, increases the bond amount for acquiring car wash license from $15,000 to $150,000. Its true. In this case the bond isn’t protecting consumers but employees. Amended text of the bill states that the bond requirements are “for the benefit of the state to compensate employees damaged by the employer’s nonpayment of wages”. (See link for full bond text and more information: CA AB 1387) Since this bond is used to protect employees it would be posted with the Department of Industrial Relations. (see link for more information: Car Wash Bond )
This can, of course, be confusing. The surety bond experts at Jurisco understand this and are happy to assist you with any of your license bond or business bond inquiries. Contact one of their knowledgeable professionals today.