California Private Investigator Examination Tips

Private Investigator Examination Tip #3

Who is who?

By Shaun E. Sundahl

Date: January 27, 2012

When taking the California private investigator examination, you must know the different terms used in the exam—if not, you will be confused when approaching different fact patterns.

The term “Private Investigator” is misleading.  When you think of the term Private Investigator, what comes to mind? Does someone licensed by the state to perform private investigative services come to mind? If so, then you are not alone. The Bureau of Security and Investigative Services (BSIS) has the wonderful idea of making no distinction between a corporation, partnership, or sole proprietor when it comes to naming license holders. Basically, a corporation who is a private investigative agency is called “Private Investigator.” Two people (or even two corporations) who own a private investigative agency are also known as Private Investigator—not even Private InvestigatorS! At least states such as Washington have the practical-mindset and refer to licensed investigative agencies as a “Private Investigator Agency.”

Someone who has no experience as a private investigator, detective, or with other relevant qualifying experience can be the Private Investigator.

How does this happen?  Remember, Private Investigator just refers to the ownership of the investigative business; it doesn’t refer to an actual person. Every Private Investigator is also known as the licensee.  BSIS mandates every Private Investigator needs to be managed by a Qualified Manager (QM) in order for the Private Investigator to conduct business. So in a nutshell, two people or fictitious owners (i.e. corporation or partnership) of the Private Investigator can conduct business as long as a QM manages the day-to-day operations of the business.

What if I want to be licensed as a Private Investigator and don’t want anyone else to run my business?

The first thing that you want to ask yourself is “Do I meet the requirements to be the Qualified Manager (QM)?” If so, then you can be the QM of your own Private Investigator license. You would be referred to as the licensee and QM. Some agency owners are the licensee, QM, and the only employee.  In fact, most private investigator agencies in America function this way. To support this statement, we conducted a survey (2012) of 110 living and breathing private investigators across America.  The results showed that at least 55% of the respondents are the business owner, manager, and only employee.

If I’m the Private Investigator and QM, what is my employee who assists me on surveillance assignments called?

Under the fundamental law of agency, the employee is referred to as an agent. The Business and Professions Code prohibits the title of “Private Investigator” to any agents of the Private Investigator.  This is why many times; investigative firms in California will refer to their employees as “Surveillance Agent.” I have also seen the terms “Investigate Associate.”

What limitations does my employee have?

The employee is theoretically, an extension of the QM’s arm.  The Business & Professions Code is silent as to the employee’s limitations.  The courts do agree that the employee may not represent himself/herself as a licensee holder. Keep in mind when you take the exam, the employee cannot engage in business without direct supervision. Once again, the Business & Professions Code is silent as to the level of supervision needed.  The Code does imply employees cannot engage the client or advertise (i.e. business cards or flyers), and may not bill the client, or provide the investigative report directly to the client. Now, if the employee is a Private Investigator licensee holder, that’s another story. 

The Private Investigator may not subcontract work to others who are not their employees.  All employees of the Private Investigator who perform investigative work must be W-2 employees. Subcontractors are referred to as 10-99 “employees.” Again, all 10-99 investigate employees must be licensed as a Private Investigator, so in actuality they must be the licensee and QM.

Here are two scenarios demonstrating a legitimate business.

Paul, a retired painter decides to open a private investigation business.  Paul has no investigative experience. Paul locates his brother, David, who has over 3 years of full-time experience as an insurance investigator.  On the application, Paul lists himself as the prospective licensee. Paul lists David as the QM.  Four to six weeks later, BSIS invites David to take the QM exam.  David passes and in 30 business days, he receives his QM certificate while Paul receives his Private Investigator license. Only David can perform the duties of a private investigator. Paul can just sit there and collect a paycheck since David is managing the day-to-day operations of the business.  

John, an experienced police investigator, decides he want to retire and perform work as a private investigator. John fills out the BSIS application. On the application, John lists himself as the prospective licensee. Later in the application, John puts his name for the prospective QM.  In 4-6 weeks, BSIS invites John to take the QM exam.  John passes and is mailed a QM certificate and a Private Investigator license.  John can now engage clients and perform the work as a private investigator.


Thank you for reading California Private Investigator Examination Tips!


Here is a brief definition list you can use prior to taking the California Private Investigator exam.

Employee- An employee is the agent of the QM, basically an extension of the QM’s arm.

Licensee- a licensee is the name of the owner(s) of the Private Investigator license.  A fictitious entity (corporation or partnership) or a sole proprietor (i.e. person) can possess the license we referred to as Private Investigator. The licensee can be the QM, but keep note that every licensee must have a QM on board. The licensee can be the QM if qualified.

Qualified Manager (QM)- The person who is qualified to manage the day-to-day operations of the business. This person must meet a predetermined set of qualifications and pass the Private Investigator exam. The QM may be the licensee.

Private Investigator- refers to the licensee.

4195 Chino Hills Pkwy #76
Chino Hills, CA 91709
ssundahl@crimebullet.com
C (909) 525-8925 (Texts messages are accepted)
B (626) 789-9072

Ask for the author of the
PI SimulatorTM, Shaun Sundahl.
Website Builder