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How to Get a License for Your Construction Company

ByEvyatar Sagie, Last Modified
Nov 26, 2018
Home
> Business Basics

If you're working in construction, there are a few different licenses that you might need to obtain.

Different states classify construction work slightly differently, so you might find that what you do is considered carpentry in one state, but general construction work in another. To get more work and avoid fines, you’ll need to check the general contractor licensing requirements for your state. Here's what you need to know about how to get the different licenses to run your construction company effectively.

When do you need a general contractor license?

Most states in the U.S. require contractors to have a general contractors' license to work legally. Others don't require any license, no matter what type of work you do. You only need to register with the State Contractors' Board or the local Department of Labor.

In many states, there are a few different types of general contractors' license. Sometimes the license you need depends on the value of the job that you’ll be doing. For example, in Arkansas, you need a license for any jobs worth over $2,000, a Residential Remodeler Limited License for work up to $50,000, and a Commercial License for all jobs over $50,000. In Mississippi and Alaska, you’ll only need a license for jobs with a value of more than $50,000, but in California, you need a license for any job worth over $500.

In other states, the license you need depends on whether you are working on residential or commercial buildings or other types of projects. Some states require licenses for residential work only, or only for remodeling and renovations but not for new build work. For example, Minnesota requires a license for residential building and remodeling jobs, but not for commercial contractor jobs.

How do you get a general contractor license?

Each state has different requirements for getting a license. We can't tell you what you'll need to get a license in every state, but you can check the requirements for your state in this useful state by state guide to getting a general contractor license. Here's a brief list of what you can expect for your license:

  • Proof of work experience, anything from 2-7 years
  • Pass a trade exam, or a business and law exam, or both
  • You might need proof of education, which can sometimes replace some years of work experience
  • Proof of financial stability, and/or a financial bond
  • Proof of general liability insurance, especially for licenses that allow you to work at the largest and most lucrative jobs

Most states issues their general contractors' license through either the State Contractors' Board or the Department for Labor, so those should be your first inquiries. It's also important to check your local county or municipal boards for local licensing requirements.

When do you need a specialty contractor license?

A "specialty contractor" license refers to contractors who are licensed as experts in one particular field. Most states use the Construction Specifications Institute codes to divide construction work into 16 specialties, although California recognizes 44 different types of contractors. In these states, specialty contractors like carpenters, painters, electricians, and roofers each have different licensing requirements.

You can find out whether you need a license to work as a carpenter, painter, roofer or HVAC technician in your state by visiting the state-by-state guides to getting licensed for your specialty. Like with general contractors, you may need to get another license at the local level, through the municipality or the county, so check your local requirements as well as your state requirements.

How do you get a license as a specialty contractor?

You’ll need to check the license requirements for your state in order to know exactly what to do to get a specialty contractor license. But you might be asked for some or all of these requirements:

  • Show work experience
  • Pass an approved training course
  • Pass a trade exam
  • Pass a business and law exam
  • Present completed specialist projects
  • Show that you are financially solvent
  • Place a bond
  • Show that you have the necessary insurance

Most of the states that demand a specialist contractor license require you to apply for just one specialization. That means that if you’re thinking of becoming licensed as a carpenter, for example, you’ll have to give up on all electrician jobs. Other states allow you to carry out any specialized work as a handyman, as long as the value of the job is under a certain amount.  

Some states, such as Alaska, consider being a handyman as a specialist contractor field on its own, but most states don't classify it as a specialization. In most states, either you’ll be able to work as a handyman without a license, or you’ll need a general contractor or remodeler license.

Although getting a license requires some effort, there's no need to be worried. Read up on the requirements for your state and specialization, get the experience and pass the exams that you need, and get to work!

Evyatar Sagie
Evyatar Sagie
See Evyatar Sagie's Profile
As Head of Acquisition at insurtech company Next Insurance, I specialize in performance-based marketing through a variety of online channels. I have worked in companies spanning the tech world, from e-commerce through to travel, personal finance, and insurance. With skills garnered in my 13+ years of experience in online marketing and growth hacking for these diverse companies, I now lead Next Insurance’s acquisition efforts to create a global brand.
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