Besides a great deal of knowledge and experience, becoming a licensed contractor takes a lot of paperwork. Each state has a different set of requirements on obtaining a contracting license, although some of them are identical or similar. For any state, it is required that a person be legally able to work in the United States and also be over the age of 18. All states have a website gateway that explains what is necessary in order to become a licensed contractor. They also often provide the forms necessary to complete and send to the proper authorities.
A Licensed Contractor needs a Business Name
For many states, it is required that a business name be registered with the Secretary of the State. The license will be issued under the business name, even if the business will be the name of the contractor. Since this is the case, it is advised to also have checking accounts and other banking services under the business name as well. Many people ultimately choose to simply follow their name with the word “contracting”, such as “Bill Wise Contracting”.
A Licensed Contractor and Insurance
Most states require that the contracting company be insured, although the dollar amount and extent of insurance differs. It is much the same as registering a car in that the government wants proof of insurance before it is issued. Check with the individual state licensing website to find out how much insurance is necessary as well as what areas of insurance are needed, such as liability. Governing agencies routinely check on the information given, and it is in the best interest of the contractor to be insured.
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Exams for Licensed Contractors
An exam of some type is always given to prove that specific knowledge pertaining to contracting is understood and will be followed by the applicant. Again, each state has their own exam, and their website will have the information on what and how to study. Also included on the site is information on when and where to take the exam. The forms needed also include a sworn statement that the qualifications and experience listed is true and accurate. Any necessary forms can be downloaded and printed, or filled out online.
Licensed Contractor Fees
There are fees of varying amounts due when taking a state exam or obtaining the license. The fees are dependent on the dollar amount of the jobs expected. For instance, if the normal contract fee will be above $25,000, then there is a set fee. The higher the expected contract amounts, the higher the fee. Other fees may also be applicable, depending on the type of contracting being done. Electrical contractors will also need permits and licenses through the State Electrical Board.
Conducting a thorough investigation of what is needed in a particular state will save time and money both short and long term. Once all of the requirements are met, the license is usually received within a couple of weeks. Contractors will need a license for each state in which they plan to work. Failure to comply with regulations set forth by each licensing authority can result in revocation of the contractor’s license.