How to Get a Contractor License

Getting a contractor license involves the completion of several steps that will allow you to legally accept and complete contracting work in your state. The application process for a contractor license includes examinations and supporting paperwork regarding legal residency, criminal background, and experience in the area of work for which you are applying for a license. You must also formally incorporate your contracting company, and purchase any required insurance or bonds in order to practice your trade.

Decide on your license class.

In many areas, you must apply for a contractor's license of a certain class. Usually, the class is determined by the monetary value of projects contractors will undertake. For example, Class C contractors might be limited to working on projects of $10,000 or less, Class B contractors on projects up to $200,000, and Class A contractors may be able to work on projects of any value. Working on projects outside of the limits of a contracting class is a violation of regulations.

Choose a specialty, if desired.

In many locations, you may be classified either as a "general contractor" or a "specialty contractor." General contractors, as the name implies, oversee many aspects of a project, while specialty contractors focus on a specific area. Common specialties include:

Awnings, coverings, and screens
Boiler, steam, and process piping
Cabinetry and finish carpentry
Fire protection
Glass and glazing
Heating, ventilation, air conditioning and refrigeration (HVAC/R)

Name and register your company.

If you want to practice as a contractor, you will need to officially register a company with your state and/or local authorities. Your contractor's license will then certify that this company can operate. You must first determine that your intended company name is not already taken. Many states will have a name availability form you can fill out, or an online database you can check to see if a company name is not yet taken.

You also need to decide on your contracting business' structure (sole proprietorship, limited liability corporation, etc.). In some states, you must also designate people to serve as your contracting business' management and qualified individuals (those with the appropriate training/experience in the contracting field). These may or may not be the same people, depending on how your business is structured. If you plan on hiring employees other than yourself, you should also request an Employer Identification Number (EIN) from the IRS.

Pass the contractor's examination.

Each state will have a required examination or set of examinations that contractors must pass in order to legally practice. These exams might be composed of multiple topics, some dealing with business aspects and others with technical and trade practices. Contact the International Code Council (ICC) for information about contracting examinations that are applicable in your area.

Purchase insurance and a bond, if required.

In many locales, you must purchase special insurance in order to practice as a contractor. Since contracting work is often dangerous and involves large amounts of money, this insurance protects you against liabilities and covers any losses. In addition to or instead of insurance, you may be required to purchase a surety bond. This is essentially protection against loss in case you are unable to finish a project or complete it satisfactorily.

Pass a background check.

In many states, you must pass a criminal background check before you can receive your contractor's license. Complete the background check according to the instructions provided by your state. Make sure to keep a copy of the certificate showing you have passed the background check-you will need this later when submitting your license application.

Fill out the application and gather required documents.

Once you have all of the preliminary steps taken care of, you will need to complete the formal application for your contractor's license. The exact application form and instructions will vary depending on your location. Contact your local planning and development board, registrar of contractors, or other relevant agency about where to find the application form and instructions. Common information and documents included with contracting license applications include:

Your company's name, EIN, and address
Your contracting class and specialty, if applicable
Copies of your company's incorporation papers
A summary of your education, training, and experience
Proof of your insurance and/or bond
Certification from the ICC or other approved agency that you have passed any required contracting examinations
Copies of personal identification
A statement of citizenship
Information about any prior contracting licenses you have had (including in another state)
Proof that you have passed a background check

Submit the application and pay any required fees.

When your application is filled out and you have included all documents, you are ready to submit it to the relevant agency. Deliver the application (by mail, online, in person, by fax, etc.) according to the instructions provided on the application form or by the relevant agency. Make sure to include any required fees with your application.

Wait for your application to be approved.

Most likely, there will be a small waiting period before your application is approved or rejected. Ask the relevant agency if there is a confirmation number or letter you should expect to receive once you submit your application, and how you will receive notice that your application has been approved or rejected.

Get a license for each state you want to operate in.

Each state has its own regulations for contracting. You must be approved for each state you want to work in, even if you already have a contracting license that is valid in another state. In some cases, you may be able to get a special temporary license (which may have a lower fee or streamlined application process) if you do already have a license that is valid in another state.

Note that contractors must follow any local or municipal contracting regulations in addition to ones enforced by the state.

Typically, contracting licenses must be periodically renewed, although the renewal application process may be easier. Check with the agency that approves contractors in your area for information about renewing your license.

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