Perhaps the most important first step to becoming a legitimate construction business is obtaining a contractor’s license. A license protects your payment rights and helps build credibility and trust when it comes to dealing with customers. Most states also legally require contractors to hold a license.
But what are the requirements for obtaining a contractor’s license? Well, we’ve dedicated this piece to discuss exactly that. So, let’s dive right in, shall we?
Understanding the Types of Contractors Licenses
The first thing you need to understand is that every state has its own requirements and regulations concerning contractor’s licenses. In some states, certain types of projects don’t require a license, while other states may be stricter regarding the same type of project. While there are some exceptions, the types of contractors licenses issued are generally consistent across states.
There are two types of contractors licenses:
· General Contractor License: In many states, this type of license is legally required in order to take up the prime contract on a construction project. At times, it may depend on the value of the project, determining whether the general contractor will need a license or not. In some states, general contractors are required to have separate licenses for residential and commercial work, meaning they will have to take tests and maintain their eligibility for both types of licenses.
· Subcontractor License: Generally speaking, the requirements for a subcontractor license tend to vary distinctly from one state to another. In California, for example, nearly all subcontractors are required to hold and maintain a license if they wish to operate within the state. In other states, the requirements may be laxer—municipalities being in charge of licensing.
Generally speaking, subcontractors that require licenses are:
· Water, gas, and sewer plumbers
· HVAC technicians
· Hazardous waste, asbestos, and mold contractors
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