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The Ultimate Guide on How to Get A General Contractor License: Unlock Your Future

Learn everything you need to know about getting a GC license, including the types of contractor licenses, general requirements, when you need one and much more.

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If you’re wondering how to get a contractor license, you’ve come to the right place! Here, we discuss how to become a licensed contractor and the most common general contractor license requirements across the US. It's essential to note that the process of how to get your contractor license varies from state to state, with some states having stricter requirements than others. This is due to varying weather conditions that require different safety precautions and building regulations. 

Our comprehensive guide will concentrate on the most common elements of the licensing process across the US and provide you with all the information you need to know about obtaining a general contractor license.

Click on a link below to jump straight to the section you’re most interested in:

What is a licensed general contractor?

A licensed general contractor is someone who can prove they have the required training, knowledge and skill set to complete a construction project with competency and high standards. They will also be able to apply for and sign off the appropriate building permits, and ensure themselves and employees have the correct compensation and liability insurance. 

First off, who needs a general contractor license?

Any building firm or individual overseeing a residential or commercial building project must obtain the appropriate general contractor license for the state they are working in. General contractors are generally prohibited from advertising their services or performing any construction work before obtaining the necessary license. 

A building firm or individual with a general contractors license may also need to apply for a speciality contracting license, such as an electrical contractor license, if the project involves this type of work. 

Reasons to get a general contractors license

The importance of licensure in the general contractor industry is huge. Obtaining a general contractors license provides consumers with certain reassurances, such as being recognized by the state as a skilled construction professional, and dedication to upholding industry standards. 

A general contractors license also ensures clients that you are not a fraud, that you have liability insurance in case of damage to their property, and that you have worker’s compensation should any employee be injured on the job. 

Here are some more reasons why it’s worth exploring how to get your contractor license:

  • To avoid financial penalties, for not being licensed in states that require it. 
  • To ensure your services are recognized as legal, and consequently avoid any criminal charges, or even jail time, for not being licensed.
  • To give consumers more confidence in you, which should attract more leads and referrals, and secure more jobs. 
  • To have more financial security, as you are able to start your own business and set your own fees.
  • To take advantage of tax breaks on things like vehicles and tools.
  • To protect your payment rights by being eligible to file a “mechanics lien” on a property if you are not paid for your work.

What are the different types of contractor licenses?

Answering the question, “what contractor license do I need” can require some research. Each state has different requirements to obtain a license, but these three types of contractor licenses remain fairly consistent from state to state: 

  • General contractors license - This basic type of license is for anyone who takes on the contract of a building project and oversees the management of that construction site. 
  • Subcontractor license -  This license is for any trades working on a building project, such as plumbers, electricians, and hazardous waste contractors. 
  • Reciprocal contractor license - If you are keen to expand your business by working across different states, having a reciprocal contractor license can help. This type of license recognizes a license from another state, ensuring the contractor doesn’t have to go through the application process and cost each time they cross states. 

If you’re still wondering ‘what type of contractors license do I need’, think about what type of work you do, and where your projects are located. For example, if you’re a general contractor overseeing construction sites in your own state, then a general constructors license is for you, while a GC who is traveling across states should think about the reciprocal contractors license to save money and time. 

Regardless of the type of contractor license that may be right for you, it’s an absolute must to have contractor liability insurance to obtain a license. 

Most common general contractor license requirements

Here are a list of the most common requirements for obtaining a general contractor license:

  • Having proof of general liability and workers’ compensation insurance
  • Demonstrating a comprehensive background check
  • Taking a four-year degree in a relevant field, such as engineering, project management, or building construction, plus one year of relevant experience. Or, having completed at least four years of experience working with a  licensed contractor. 
  • Passing a trade, business exam, and law exam
  • Having proof of financial stability

What’s the difference between a general contractor license, registration and certification?

When setting up a construction business for the first time, you will have to deal with licensing, registering and certifying your firm. Here we clarify the differences between these three important business elements:

  • Licensure - In most states, the process of obtaining a license can be strict and require you to show your knowledge of the industry’s codes and regulations. A license therefore helps to demonstrate your capabilities as a skilled professional in this field. As well as meeting the requirements listed in the section above, you may also need a reference from another licensed tradesperson, pass an exam or prove your work history. 
  • Registration - Registering your building company involves filling out paperwork at your state or local county clerk’s office and paying the required fee. This registration doesn’t prove anything about your company’s expertise or reputation, it's simply a formality. Some states have rigorous registration requirements, like taking a course, while others have no requirements whatsoever.  
  • Certification - If a certain aspect of your trade involves installing specific  products, such as windows, then your business will require a certification to prove you know how to fit the products correctly. Similarly, if your trade carries a health and safety impact, such as removing asbestos or mold, you will have to gain certification from a specific environmental agency to show you have the correct training to complete the hazardous work competently. Learn more in our Guide to Construction Certifications.

Where to get a contractor license?

The licensing requirements differ from state to state, so before you spend money on an application for your general contractor license, investigate whether a license is required in your state or not. 

If it is, then you can apply for your general contractor license by researching your state's governing body and looking up its professional licensing department. There will be details on their website on how to apply, or you can call them directly to discuss the process.

How hard is it to get your contractor’s license?

In some states the process for obtaining a license is stringent, and can take a lot of time and effort. Here are a few challenges you may face:

  • Passing exams about the industry’s practices, codes, and regulations
  • Showing knowledge and experience of business processes 
  • Coming up with the correct funds to pay for license fees
  • Fulfilling the requirement for work experience within the industry under a licensed contractor

How much does it cost to get your general contractor license?

The cost to become a general contractor varies depending on your location and what is needed to obtain the license. For example, in Alabama, an application fee is $300, while in Tennessee and Florida, the fee is $250. According to the Contractors State License Board, in California, several fees are involved, including an initial application fee of $450, and a license fee of either $200 or $350 depending on your status as a sole owner or non-sole owner. 

General contractor licenses last for 2 years and must be renewed before their expiry date to avoid facing fines or legal fees. In California, this renewal fee ranges between $450 - $700. Do your homework to understand all costs associated with the type of contractor license you need in your area to set yourself up for success.

What are the documents required for a contractor license?

The most common documents required to obtain a GC license include: 

  • Identification to prove you are over 18 and are a U.S. citizen or legal permanent resident
  • Required license application forms
  • Background checks
  • Documentation of qualifications and proof of passing necessary exams
  • References and details of experience in the construction industry
  • Proof of business registration 
  • Net worth to show financial stability 
  • Proof of general liability insurance and workers’ compensation insurance if you plan to employ people
  • Fingerprints and an Asbestos exam (in some states, such as California)

How long does it take to get your general contractor license?

It generally takes two months to complete the following steps of the general contractor licensing process:

  1. Register your business at the appropriate local city department 
  2. Choose the type of license for your business needs
  3. Complete the appropriate license application forms
  4. Provide copies of the required paperwork, such as references, qualifications and background checks
  5. Provide proof of insurance policies
  6. Pay the necessary application fees
  7. Take the required general contractor license exams

Top tip to save time: Any errors within the paperwork and forms can result in an application being rejected, which will impact the time it takes to obtain the license. Double check all paperwork is free of errors before submitting it.

What is general contractor license reciprocity?

A general contractor license reciprocity agreement is a shortcut, allowing contractors to work in other reciprocating states without having to go through the lengthy process of applying for another license.

  • How does general contractor license reciprocity work? If a contractor is performing work in a new state, a contractor license reciprocity recognizes their original license from the state they first obtained it from, preventing them having to present all the paperwork again. It also means a contractor doesn’t have to pay application fees again, or wait for the results of examinations.  
  • How do you qualify for general contractor license reciprocity? To qualify for a reciprocity license, you should check the requirements of the state you plan to work in, as not all contractors are automatically applicable. For example, some states require you to take a business exam, while others, such as Florida, require you to have held a good standard of license for at least 10 years before qualifying for a reciprocity license. 

Below we list the states that do and don’t offer general contractor license reciprocity, however, it’s important to remember that each state has its own method of operating when it comes to license reciprocity. For example, some states accept licenses from states across the country, while others only accept licenses from neighboring states. It's essential to research the types of reciprocity licenses issued by your state  before applying.

States that offer general contractor license reciprocity or related reciprocity licenses:

  • Alabama 
  • Alaska
  • Arkansas
  • Arizona
  • California
  • Colorado 
  • Delaware 
  • Florida 
  • Georgia 
  • Idaho
  • Iowa 
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire 
  • New Mexico 
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • South Carolina
  • South Dakota
  • Tennessee 
  • Texas
  • Utah
  • Vermont 
  • Virginia
  • Washington
  • West Virginia
  • Wyoming 

States that do not offer general contractor license reciprocity:

  • Connecticut
  • Hawaii
  • Illinois
  • Indiana
  • Kansas
  • Michigan
  • Missouri
  • New Jersey
  • New York
  • Rhode Island
  • Wisconsin
  • Pennsylvania

How to become a general contractor without experience

While most general contractors are expected to have a set number of years of experience to qualify for licensure, it’s possible to become a licensed general contact if you don’t. For example, you may have transferable skills that could help you secure a job in construction, such as industry knowledge, business management and great customer relations.

Read on for some more useful ideas for becoming a general contractor without experience: 

  • Work with a responsible managing officer (RMO) or responsible managing employee  (RME) - By partnering up with an RMO or and RME, these licenced general contractors can inform the board they are responsible for you under their license, and allow you to essentially piggyback off their license to complete jobs. However, this does mean they will expect the highest-standard from you, so you don’t impact their reputation. 
  • Receive a waiver from the licensing board - Some states may allow you to waiver your experience if you meet every other requirement needed to gain a license. Discuss this possibility with your local licensing board.
  • Take over a grandfathered license - A peculiar term, yet it makes sense once you read into it. Taking on a grandfathered license is when an experienced contractor passes on  their license to a new contractor when they retire. This could be a relative in a family business, or it could simply be an acquaintance and you decide to take over the retiring contractor’s business. You’ll still have to pass the state licensing exam to qualify, however it's a great way to enter the industry if you don’t have experience. Obviously by taking on another contractor’s business, you inherit everything from their reputation to any outstanding issues, so be prepared to deal with unforeseen problems. 
  • Form a company with an existing licensed contractor - By creating a general construction company with a licensed individual, you can apply for contracts using their licensing number and build up your own wealth of experience. 
  • Gain experience while preparing for the exam - While preparing for the licensing trade or business exam, enroll in an apprenticeship or take on work experience with a general contractor to gain valuable skills that you can use to earn your own license. Of course, this could make the licensing process longer, however, you will start your career off on a good footing. 
  • Get educated - If you have a degree in a related area, such as construction management, or you’ve taken a training program through a professional guild, you may be propelled through the licensing process without needing to gain experience. Learn more about Top Construction Schools in our next guide.

Now that you know what’s needed to become a licensed general contractor, it’s important to research your state’s licensing requirements before taking the plunge.

Sign up for a free trial of Houzz Pro to leverage our all-in-one general contractor business software to help get your business off the ground. Then, create a profile on Houzz to take advantage of the Verified License badge where you can show off your license to build trust and credibility with homeowners.

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