What is a Bond of Qualifying Individual?
This is also known as an “RME” or “RMO” bond because it covers the responsible managing employee or responsible managing officer of a licensed sole proprietorship, partnership, or corporation. The RME or RMO bond is similar to a Contractor’s License Bond in that the surety promises the State of California that the RME or RMO will comply with the Contractors License Law and agrees to pay claims made by homeowners, employees, and other eligible persons as a result of the RME’s or RMO’s violations.The amount of the RME or RMO bond is $7,500 until 12/31/06. Effective 01/01/07, the CSLB will require a bond in the amount of $12,500 for a Qualifying Individual (RME/RMO). Note that an RMO bond is not required for an RMO who owns 10% or more of the corporation’s voting stock. Remember that the surety is entitled to reimbursement for any expenses it incurs on account of violations by an RME or RMO.
