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Old 08-09-2019, 03:11 AM   #1
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Default Being Assigned as Master Electrician for Electrical Contractor in Texas

I am a Master Electrician in the state of Texas. I have a friend/business partner who just got his Journeyman Electrician license in Texas. He is wanting to open his own electrical business as an LLC. In order for him to be a Licensed Electrical Contractor with the state of Texas, he is needing to employ and assign a Master Electrician to his business. I am not going to be owning a percentage of this company that he is starting. I will just be an employee and the company will have me assigned as their Master Electrician. I currently own my own LLC that is 100% owned by me, that my Master Electrical License is assigned to and I am also currently employed by another electrical contractor who is not using my Master License.

What are my risks if I allow myself to be assigned as the Master Electrician for my friend's company?

Will I be liable for any reason if my friend's company fails financially, if I do not have ownership and am an employee?

Will it effect my Master License and name if their company fails and I am the assigned Master Electrician?

What can happen to my Master License if it is assigned to this company and a licensed Journeyman Electrician employee or sub contractor completely mess things up at a job site and the customer takes the company to court??? The company would have all General Liability and Workman's Comp, etc. insurance set up for their business.

If y'all don't know the answers to those questions... do y'all happen to know what type of agency or lawyer in Texas that I would need to contant to find who can answer these questions?

Thanks in advance!
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Old 08-09-2019, 04:27 PM   #2
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This ^^^ is why I always encourage side jobbing.
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Old 08-09-2019, 06:18 PM   #3
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If it's his contractors license, he's using for his business, it's on him, you're only a figurehead employee. With no ownership, how could you be held liable?
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Old 08-09-2019, 08:39 PM   #4
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He will not be using his personal license for his business because it is not at the Master level, just the Journeyman level. He will need to use my Master License Number to be assigned to his Electrical Contractor business he is starting. I wouldn't think that I would be financially liable for the company if I have no ownership. But, I am worried about my Master Electrician License being tied to a bankrupted company. Would that effect me? Also, I am wanting to know what I am liable for if an employee or sub contractor of the company messes something up on the job site and the customer takes the company to court? How would that effect my license? Does all of that make sense?
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Old 08-09-2019, 09:16 PM   #5
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If I were you, I'd have a conversation with a lawyer.
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Old 08-10-2019, 10:49 AM   #6
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In Florida, The license holder is personally responsible for every task on every job and every dollar owed and spent.
I'm sure Texas is different. I would suggest an attorney be involved and find some kind of insurance to cover your exposure.

I would be just a bit concerned with a new journeyman looking to open a business and asking to use another persons license.

1. Does this person have any kind of business plan?
2. Does this person think if he charges double his wages for work he gets to keep all of it?
3. Does this person have enough money to start a business?
4. What is motivating this person to open a business?
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Old 08-10-2019, 02:58 PM   #7
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I believe you can lose your license if there are serious issues with the work, but he would be financially liable.

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Old 08-10-2019, 03:55 PM   #8
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One should expect that when an EC gets into trouble his installs blow-up, too.

He runs out of cash -- and so the installs suffer.

The AHJ will absolutely expect you to 'step up' and cover jobs that have gone sideways.

I've seen PMs fry $80,000 control boards.

If he's only working small time stuff, then that's not going to be an issue.

But, then, you're pulling an awful lot of professional exposure.

You should expect to lose the friendship -- as you are -- de facto -- becoming business partners.

Whether you see that or not -- and you are very much the minority partner.

You'll have no enforcement -- no control.
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Old 08-10-2019, 10:44 PM   #9
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You might reasonably wonder how in Hell a control board could be priced at $80,000?

1) Panic purchase at outrageous mark-ups because you HAVE to jump the queue.

2) It's totally custom... not at all off the shelf. Yeah, they've got you in the cross hairs.

3) It's CRITICAL to getting a Certificate of Occupancy. Each day of denial is costing the end customer a staggering fortune.

( I once worked on a 25 screen theatre. Each SINGLE day was charged back to the EC as if EVERY seat was filled watching Star Wars... if the opening was delayed. Cost per day across all of those seats: $60,000. Yes, the entire enterprise was synched to Star Wars I. I got to see it until I was falling asleep.)

It was completed just under the wire... thanks to yours truly.

Do NOT let anyone near your license get into such deals.

As for myself, I'd Scotch the whole deal. Your buddy is too young.

Electrical Contracting is astoundingly complicated... financially, especially.
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Old 08-11-2019, 09:10 AM   #10
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While it does not specifically apply to your situation, in Ontario there is a set of requirements for a Master Electrician (ME) and you can only be appointed to one Licensed Electrical Contractor (LEC) as their Designated Master Electrician (DME) https://www.esasafe.com/assets/files...eline-2018.pdf

I only post this as I might suspect there may be a similar policy / legislation in your state, but it is only a guess for sure.

While we have all of this, I have never seen a DME or in fact any journeyman lose their licence for anything here; it all seems to rest with / on the LEC.

Cheers
John
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Old 08-13-2019, 09:51 AM   #11
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Originally Posted by TimBrick View Post
I am a Master Electrician in the state of Texas. I have a friend/business partner who just got his Journeyman Electrician license in Texas. He is wanting to open his own electrical business as an LLC. In order for him to be a Licensed Electrical Contractor with the state of Texas, he is needing to employ and assign a Master Electrician to his business. I am not going to be owning a percentage of this company that he is starting. I will just be an employee and the company will have me assigned as their Master Electrician. I currently own my own LLC that is 100% owned by me, that my Master Electrical License is assigned to and I am also currently employed by another electrical contractor who is not using my Master License.

What are my risks if I allow myself to be assigned as the Master Electrician for my friend's company?

Will I be liable for any reason if my friend's company fails financially, if I do not have ownership and am an employee?

Will it effect my Master License and name if their company fails and I am the assigned Master Electrician?

What can happen to my Master License if it is assigned to this company and a licensed Journeyman Electrician employee or sub contractor completely mess things up at a job site and the customer takes the company to court??? The company would have all General Liability and Workman's Comp, etc. insurance set up for their business.

If y'all don't know the answers to those questions... do y'all happen to know what type of agency or lawyer in Texas that I would need to contant to find who can answer these questions?

Thanks in advance!
What part of Texas? I'm a little confused about this post. You own a LLC, and master for another company you work for currently. Why are you so worried about this guy if your already doing it for someone else? I would have to go back and look, but I don't think your masters can be tied to 3 companies.
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Old 08-13-2019, 09:55 AM   #12
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A person who holds a Texas master electrician or master sign electrician license can only be assigned to a single electrical contractor, unless the master electrician owns more than 50 percent of the electrical contracting business.
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Old 08-16-2019, 12:57 PM   #13
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You and your Masters license is responsible for all work done under your license. I would think LONG and HARD before I would do that. Truth be known, if I do not own part of the company (and I mean at least 50%) Then my license would not be used. ( I am an Electrical Contractor in Texas)
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Old 08-17-2019, 03:05 PM   #14
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My Master license is only tied to my LLC that I own 100%. I am currently employed by another electrical contractor in Houston, but they are not using my Master License for their company. So, my license will only be used by 1 sub contractor and my own business that I own. I am not currently operating my business because there are some issues that I need to take care of before I can take on any more work, but my license is still assigned to my LLC.

My friend will only need to have my Master license assigned to his company for 2 years until he is able to test for his Master license and have his Master license assigned to the company. While my Master license is assigned to his company, he will only be providing services for residential customers. He does not plan on moving into the commercial and industrial side until he is a Master. His wife is an accountant and has put together a business plan and has been working over the past year on slowly planning out all aspects of their business while she has been at home with their baby. My friend and his wife have been planning on opening their own business for a while now, but were going to wait until he got his Master license. Now, they are looking into other options to go ahead and start their business since all of the business aspects, legalities and accounting records are in order for their LLC.

They have very minimal start up costs because they will start the business from their home and have tools, materials and a home office set up for the accounting work the wife currently does. They have minimal cash on hand and will be financed through working capital. They do have personal investors, such as family members and friends, who will be able to invest in their company as needed throughout the start up. They have already built up a clientele in the area over the years from them completing side jobs and being involved in the community. They have gotten to a point where they are having to turn down side jobs because they don't have the time to complete the jobs, due to my friend working full time for an electrical contractor. They also don't want to take risks completing work unofficially. They also have a lot of friends who owe them for work he and his wife have done previously over the years. They have someone who will help them with marketing and several others who can help generate jobs to be scheduled, they have someone who will develop their webpage for free, they have an IT person who will take care of all IT issues, my friend is also a mechanic and will handle all maintenance issues for the work vehicle and they have.

His wife has offered to provide her accounting and business services to get my company back on track so I can be operational in my own business. Yes, I understand that he will be my competitor in the industry, but there is more than enough work in our area for the both of us. We intend on taking advantage of our business relationship in the future. They have also offered to pay for a liability insurance, like an umbrella policy, that directly covers me in case their General Liability insurance isn't enough. I will be able to approve of all electricians and sub contractors that the company uses while they are operating under my license as well. And will be inspecting each job once they are completed to make sure that all work is up to NEC requirements. We have not discussed rates, sign on terms and everything else yet. We will be sitting down tomorrow to discuss everything and for them to provide me with their business plan.


I know I need to find a lawyer to speak to before I sign anything. Do y'all know what type of lawyer I will be needing to search for? Is there a way to find lawyers that have specific knowledge in electrical contracting? I will also need the lawyer to review the contracts that I am presented with and to draw up my own contracts. Is there a specific type of lawyer I need to search for? I am in the Houston, TX area.

Thanks!
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Old 08-19-2019, 11:53 AM   #15
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My Master license is only tied to my LLC that I own 100%. I am currently employed by another electrical contractor in Houston, but they are not using my Master License for their company. So, my license will only be used by 1 sub contractor and my own business that I own. I am not currently operating my business because there are some issues that I need to take care of before I can take on any more work, but my license is still assigned to my LLC.

My friend will only need to have my Master license assigned to his company for 2 years until he is able to test for his Master license and have his Master license assigned to the company. While my Master license is assigned to his company, he will only be providing services for residential customers. He does not plan on moving into the commercial and industrial side until he is a Master. His wife is an accountant and has put together a business plan and has been working over the past year on slowly planning out all aspects of their business while she has been at home with their baby. My friend and his wife have been planning on opening their own business for a while now, but were going to wait until he got his Master license. Now, they are looking into other options to go ahead and start their business since all of the business aspects, legalities and accounting records are in order for their LLC.

They have very minimal start up costs because they will start the business from their home and have tools, materials and a home office set up for the accounting work the wife currently does. They have minimal cash on hand and will be financed through working capital. They do have personal investors, such as family members and friends, who will be able to invest in their company as needed throughout the start up. They have already built up a clientele in the area over the years from them completing side jobs and being involved in the community. They have gotten to a point where they are having to turn down side jobs because they don't have the time to complete the jobs, due to my friend working full time for an electrical contractor. They also don't want to take risks completing work unofficially. They also have a lot of friends who owe them for work he and his wife have done previously over the years. They have someone who will help them with marketing and several others who can help generate jobs to be scheduled, they have someone who will develop their webpage for free, they have an IT person who will take care of all IT issues, my friend is also a mechanic and will handle all maintenance issues for the work vehicle and they have.

His wife has offered to provide her accounting and business services to get my company back on track so I can be operational in my own business. Yes, I understand that he will be my competitor in the industry, but there is more than enough work in our area for the both of us. We intend on taking advantage of our business relationship in the future. They have also offered to pay for a liability insurance, like an umbrella policy, that directly covers me in case their General Liability insurance isn't enough. I will be able to approve of all electricians and sub contractors that the company uses while they are operating under my license as well. And will be inspecting each job once they are completed to make sure that all work is up to NEC requirements. We have not discussed rates, sign on terms and everything else yet. We will be sitting down tomorrow to discuss everything and for them to provide me with their business plan.


I know I need to find a lawyer to speak to before I sign anything. Do y'all know what type of lawyer I will be needing to search for? Is there a way to find lawyers that have specific knowledge in electrical contracting? I will also need the lawyer to review the contracts that I am presented with and to draw up my own contracts. Is there a specific type of lawyer I need to search for? I am in the Houston, TX area.

Thanks!
Now that's detailed. I can give you my two cents which isn't worth much, and I'm sure others will disagree with me. I say that's whats insurance is for. As long as he has insurance I wouldn't worry about it to much. If you are worried just do a couple walks on jobs that he is doing and make sure its up to par for you. I have an uncle that has been doing this for 10 years for a company here in Dallas, and they pay him 800-1000 per month. He also has a deal to charge 30.00 an hour plus mileage when the city wants the Master to pull the permit. Good Luck and by the way I grew up in Stinkadena.
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Old 09-25-2019, 06:57 PM   #16
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Did you find a lawyer to help you? We are trying to do the same - but the legal side seems complicated
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Old 09-25-2019, 11:08 PM   #17
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Did you find a lawyer to help you? We are trying to do the same - but the legal side seems complicated

Can you elaborate on what you are finding @Ablima08 ?
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