How do I Become a Licensed Contractor?

Every state has their own rules and requirements if you want to become a licensed contractor; someone who has passed the state exam for all contractors. If you move to another state, expect to have to take the state exam to become a licensed contractor, regardless of your status in your prior state.

An unlicensed contractor who has accepted more than nominal work can be assessed a fine. He may also find that they are unable to sue for non-payment of a construction contract. Most customers will not hire an unlicensed contractors, as they are not protected under state law and lose the right to sue for poor workmanship.

There are three steps to become a licensed contractor: meet the minimum qualifications, register your business, and pass the written exam. There are certain minimum requirements before you are eligible to become a licensed contractor. Although the requirements vary by state, there are several items that are consistently required by all states.

All applicants must be at least 18 years of age with a high school diploma or its equivalent. They must be United States citizens or have legal residence status. Applicants must have legally registered their businesses and may be required to provide proof of financial resources to operate a business. Letters of reference and proof of experience or related education are also required.

To register your business, you must submit a business license form to the state business office. They will require the business name, primary business address, types of services provided and owner's information. There is a fee associated with registering a business. Many states require all contractor business to pay a state license bond. In addition, a licensed contract must have proof of liability and workers compensation coverage.

The licensed contractor exam is usually a multiple choice test. The test varies in length by state, but range between one and two hours long. The purpose of the exam is to ensure that all contractors have a minimum level of knowledge about business and the trades.

The exam itself has a wide range of specialties, designed to cover all the skilled trades. Select the area that you are going to focus your business on and write that exam. People who are going to become general contractors may be required to write more than one exam. A common example is a licensed plumber who is going to open a general contractor firm. They will need both a plumber license and a general contractors license. However, this is only required if they are planning to compete the work themselves.