Why You Should Get California Contractor License
A government-issued license is one of the basic requirements to operate as a contractor or subcontractor in the United States. In California State, the license is issued by the Department of Consumer Affairs, Contractors States License Board (CLSB). Without a license, you cannot work on any project that has a total cost of $500 and above, including labor and materials.
This applies to contractors, specialty contractors, subcontractors, and anyone engaged in the business. You must be licensed to submit a bid for any project worth that amount within the state. The rule applies to all businesses or individuals who construct or alter any structure such as building, road, highway, parking facility, or excavation, railroad.
What are the Benefits of Becoming a California Contractor License?
Apart from being a requirement of the law, the following are some of the benefits you stand to gain if you become a licensed contractor in California:
It Gives Your Brand Credibility
If you desire growth and expansion of your firm in this Land of Milk and Honey, then becoming licensed is a must. Prospective customers often do a background check before offering their projects to a contractor. It gives a credible first impression of you. For instance, having your license number proudly displayed on your business card will make people trust your brand as legit and reliable.
It Helps Your Business Grow
It also allows you to bid on larger projects that require a license. Also, without a license, you cannot submit a bid for public works job.
In addition, there are some projects that will require taking a loan to complete them. Your license will be one of the first things you will be asked to present before you can get a loan from any financial institution, such as banks.
Get More Hands for Your Project
It also allows you to hire more workers to get a project done in real time. Without a license, you may face legal action for not carrying worker’s compensation insurance. Remember, workers comp is part of the requirements for the California contractor license.
Helps You Get Paid for the Work Done
As a licensed contractor, you have nothing to worry about in terms of being paid after delivering a project in accordance with the contract signed with your customer. For example, if a customer tried to outsmart you or deny you of your due payments, you have all the right to use the court to get your money. This is a privilege that cannot be leveraged by an unlicensed contractor. Also, under the Business and Professional Code section 7031, a customer is allowed to reclaim all money paid to any unlicensed contractor. This is a situation that could bankrupt a business, especially if you have spent lots of money and time executing the project.
Steps to Getting California Contractor License
In all, the process involves seven (7) different stages as follows:
Determine if You Are Eligible: You must be at least 18 years of age, have a minimum of 4 years journeyman level work.
Complete Application: Here, you will be asked to choose a license application that pertains to your specific line of business. All application forms will require filling in your Individual Taxpayer Identification Number or a Social Security number.
Submission of Application and Fees Payment: Your application must be submitted with a fee of $300
Fingerprint: The CSLB will review your application. After this, you will be asked to undergo fingerprint screening as part of the board’s mandatory criminal background check.
Work Experience Verification: You will be required to present certain documentation to confirm if you meet the minimum work experience requirements.
Examination: You will have to take and pass written law and trade examinations unless you meet the requirements for a waiver.
Get Your License: If you have passed the exam or received a waiver, you will be issued your license. Eureka! You have become a licensed contractor in the Golden States!