A contractor’s license can be critical for an independent contractor to posses in order to keep their projects running smoothly. If a contractor doesn’t have a license and keeps going with their projects, they have the possibility of getting shut down and fined or if they finished a job and the person didn’t pay the contractor has no right to sue without a license. Depending which state the contractor works in the license requirements are different for each state, so make sure to check out your own state that you work in. We are going to go over some questions about how to get your contractors license and all the requirements.

Who is required to be licensed?

All businesses or individual contractors who construct or alter any building, highway, road or other structures in CA must be licensed by the CSLB if the total cost for the project including labor and materials is $500 or more.

Advantages of a Contractor’s License

There are plenty of reasons to get a Contractors License:

• You are able to do projects that are over $500.
• You can take a client to court if they hadn’t paid for the work that was done. Without a license, a contract over $500 is considered illegal.
• You can legally market and advertise your business.
• A contractor license makes your business eligible for special discounts from many material suppliers and improvement stores.
• You can join builders associations that have job boards, plan rooms and group insurance.

What are the Licensing Classifications?

The classifications are broken down into four different categories.

• A - General Engineering
• B – General Building
• C – Specialty Classes
• D - Limited Specialty Classes

What Kind of Experience is Required?

The required amount of experience is at least four years of journey level experience to qualify for the exam. The state gives you credit for having experience as a journeyman, foreman, supervising employee or contractor or a combination of experience and education.

Well What if you don’t have four years work Experience?

It is still possible to qualify by substituting apprenticeship or technical training or other education for work experience. For example, you could receive a credit of up to two years for a college degree in business. You don’t necessarily need a college degree. If you have transcripts showing the course work in construction technology, drafting, accounting, etc., can also be substituted for a portions of the four-year requirement.

How Do I Prove My Work Experience?

You can prove your work experience by having someone that you worked for or someone in the building trades who has direct knowledge of your work to sign a “work cert” (Certification of Work Experience). You don’t need a work cert for each and every job, one person may sign for all four years of required experience.

Can I qualify with self-employment?

Yes

Can I use Owner/Builder Experience?

Yes, but its not recommended. Owner/Builder experience is reviewed separately to evaluate the amount of experience time you will be granted. On average, the time you are granted is at least three fourth of what you submitted.

What happens if my application isn’t approved?

If the application isn’t approved it will be returned to you with a letter asking you to supply additional information or make corrections. You will have 90 days to comply.

Is there an examination requirement?

Yes there is. If qualified the person must pass the Law & Business and Trade exams, unless you meet the requirements for a waiver of either one or both exams.

Does everyone have the same exam?

If this is your first license, you will take the two exams, the Law & Business and Trade exam. Everyone takes the same Law & Business exam but every person takes a Trade exam that corresponds to your particular trade.

What happens if you fail the exam?

Both exams are scored individually and can take either exam as many times as necessary within an 18 month period at $50 per retake. If you don’t pass within the 18 month period then you have to reapply. If you passed one of the exams it still counts for up to 5 years.

Is workers compensation insurance required?

Yes, unless the entity has no employees, then a certificate of exemption can be filed with the contractors state license board.

What is the cost to apply for a license?

The application filing fee is $250, the initial license fee is $150. Both of these fees can be paid when you submit the application. If the applicant chooses to remove his or her application after it was submitted, only the initial license fee will be refunded.

Am I able to apply for more than one classification at a time?

No, you first need a license number before you are able to apply for additional classification. For example, you might have just received your B license as general builder, and then later add classification such as a C-10/ electrician.

Does the CSLB recognize licenses from other states?

Yes, the CSLB has reciprocity agreements with Utah, Nevada and Arizona. It is possible to get a CA license if you hold a license in one of these states by only having to take the CA Law & Business exam. The key is you must have been licensed in the other sate for a minimum of 5 out of the last 7 years.

What happens if I get caught operating without a license?

You will be given a misdemeanor in CA and face fines that can range from $200 to $15,000. A citation would be issued that would remain at the Contractor State License Board of California for up to 10 years. So if you were to apply for a license, your application would be delayed for an extended period of time while they review the circumstances of the citation.

Am I required to be fingerprinted?

Yes, fingerprints are required for all new applications, adding officers to an existing license, replacing the qualifier, etc.

What if I have a misdemeanor conviction from years ago? Can I still get my license?

Yes, you can still get your license but the application processing time will be greatly increased. All fingerprints go through the CA Department of Justice and the FBI before being sent to the CSLB. At the CSLB the records will be reviewed by criminal background unit or CBU. At the time of this video, the current backlog in the CBU is around 6 months. Which means that receiving a test date and obtaining your license could take as long as 9-10 months.

Are there any financial requirements to qualify for a license?

Yes, the CSLB requires that you maintain at least $2500 in working capital.

Titles or Positions and Business Entities

What is the difference between an RMO and RME?

RMO or Responsible Managing Officer is the qualifier for the license and may or may not hold any ownership in the company. An RME or Responsible Managing Employee is the qualifier for the license and may not hold any ownership in the company.

Can an RMO be a qualifier on more than one license?

Yes, an RMO can be the qualifier on up to three corporate license as long as you hold at least 20% ownership in each company.

Can an RME be a qualifier on more than one license?

No, an RME can only qualify one license at a time. You may have a sole owner license but it must be inactive while the person is acting as an RME.

Can an individual have more than one license?

Yes, an individual can have as many as 10 sole ownership license.

Can a sole owner also be an RMO or qualifier on another license?

Yes, an individual can be an RMO on another license as long as they hold at least 10% or more of the company.

Should I incorporate, operate as a sole owner or a partnership?

• The difference between these entities are that when a license is issued to a corporation, its owned by the corporation. Qualifiers and officers can come and go, but the license belongs to the corporation.
• A sole owner license does not have the same protection a corporation has but the license belongs to the individual.
• A partnership requires at least two members, a qualifying partner and general partner. If either partner leaves the company the partnership license is automatically cancelled.

Can I form a limited liability company or LLC?

No, contractors are not allowed to form LLCs.

Are there advertising requirements?

Yes, your license number must be on all advertising materials.

Can I advertise that I’m bonded?

No, the state law prohibits advertising that you are bonded.

Can I offer electrical services if I have a plumbing license?

No, you can not advertise, offer, or enter into a contract to perform services for a classification that you do not hold.

Like I said in the beginning, requirements for a licensed contractor varies by state. Make sure you check out the state’s requirements in order to be prepared for that states exams. Now fill out the application and follow the steps. Best of luck getting your State Contractors License.