Getting your license is a crucial part of establishing your business in a new state, whether you’re moving your business or expanding it. State-by-state regulation can make the process of applying for and obtaining a license seem confusing. Don’t sweat: we’ll walk you through whether or not you need a license, what kind you need, how to get it, and what to do with it.
Who needs a general contractor license?
California requires a licensed contractor for construction projects with costs totaling $500 or more. General contractors and subcontractors must be licensed before submitting bids on home improvement projects.
There are exemptions to that law, including projects for which the cost of labor and materials comes to less than $500; owner-builders improving or building upon their own property; and public personnel working on projects. Find the complete list of exemptions here.
Which kind of general contractor license do I need?
The California State Licensing Board (CSLB), a branch of the state’s Department of Consumer Affairs, has four main license classifications. Anyone over the age of 18 with “the skills and experience necessary” to manage a construction business may apply, according to CSLB.
A — General Engineering Contractor: This particular license applies to contractors whose work is mainly with public works requiring specialty engineering knowledge and skill, according to CSLB. Relevant divisions include infrastructure like bridges, railroads, refineries, and chemical plants as well as work with irrigation, flood control, bridges, flood control, irrigation, and chemical plants.
B — General Building Contractor: The state of California defines a general building contractor as a contractor whose work involves building structures, and whose primary trades are framing and carpentry. Contractors with a general building license are prohibited from taking contracts involving trade work beyond framing and contracting — unless, of course, they’re in possession of specialty contracting licenses or are working with subcontractors who possess relevant specialty licenses.
C — Specialty Contractor: This classification applies to contractors whose primary business involves “the use of specialized building trades or crafts.” The primary code specifically cites installation and laying of carpets, linoleum, and resilient floor covering, as well as servicing or testing fire extinguishing systems. There are 60 subdivisions of specialty contractors, including roofing, plumbing, solar — even swimming pools.
Limited Specialty Classification: These are distinctive, individual categories not covered by the specialty contractor classification. Subsections include elevated floors, doors, gates and activating devices, and tree services, among other things.
How do I get my general contractor license in California?
If you’re a first time applicant, determine which classification you’d like to apply for, and then begin the process following the directions on the form linked here. Applicants must pay a $330 fee and send in certification of work experience.
Once the CLSB accepts your application, you’ll be asked to appear for the official examination (and to complete a fingerprinting). Examinations run three and a half hours and are multiple choice in format.
Once you’ve passed the exam, you’ll be asked to pay a licensing fee of $200, submit proof of worker’s compensation insurance, and file a contractor’s bond for $15,000. The contractor’s bond effectively serves as consumer protection in the event a contractor fails to repay owed compensation.
Actual cost of the bond depends on your credit and experience; contractors will generally pay between 1 and 15 percent, depending on those factors and prior history of claims on bonds.
Once you’ve submitted proof of worker’s compensation, the bond, and paid your licensing fee to the CSLB, you should receive your license in about a week’s time.
What can I do once I’m licensed as a general contractor?
Your license means you’re legally able to work on projects above the $500 threshold, submit bids on home remodels or renovations, and work with the CSLB to sue customers who don’t pay, in small claims court or otherwise. You can also join trade associations and receive discounts from suppliers. Licenses are valid for two years at a time, and may be renewed.