Why You Should Get California Contractor License

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:

Step I

Determine if You Are Eligible: You must be at least 18 years of age, have a minimum of 4 years journeyman level work.

Step II

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.

Step III

Submission of Application and Fees Payment: Your application must be submitted with a fee of $300

Step IV

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.

Step V

Work Experience Verification: You will be required to present certain documentation to confirm if you meet the minimum work experience requirements.

Step VI

Examination: You will have to take and pass written law and trade examinations unless you meet the requirements for a waiver.

Step VII

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!

Understanding California Contractor License Classifications

Apart from being a compulsory requirement of the law, having a contractor license increases your chances of winning a project bid in California State. Depending on your line of business, your California contractor license will be issued under any of these three business and professional code classifications: A Class, B Class, or C Class.

Classification A: General Engineering Contractor: 7056

You will be classified under this category if your main contracting business is in connection with fixed works that require specialized engineering skill and knowledge. This includes the individuals and businesses in divisions like drainage, irrigation, flood control, water supply, and inland waterways, harbors, docks and wharves. Others are shipyards and ports, dams, reclamations, works, railroads, etc.

Classification B: General Building Contractor: 7057

A general building contractor is someone whose contracting business relates to a structure being built or modified. You will need this classification if the project requires two or more different trades or types of subcontractors. As a general contractor with this California license code, you may also take a subcontract or prime contract for carpentry or framing project.

Classification C: Specialty Contractor: 7058

The California Class C license code is for specialty contractors who are into crafts or trades that do not fall within the scope of a general contractor. Such include those who engage in services and testing of fire extinguishing systems, installation and laying of resilient floor covering, carpets, linoleum, etc. Those who specialized in roofing, plumbing, concrete, and heating, ventilation, and air conditioning (HVAC) will also be under this category.

Eligibility for California Contractor License

California contractor licenses are issued by the Department of Consumer Affairs Contractors State License Board. To become a licensed contractor, you will need to be at least 18 years old, present evidence of $15,000 bond, and be a citizen or legal resident in the United States. Other requirements include fingerprint screening as part of the criminal record background check. Additionally, you must pass the basic license examination or qualify for a waiver.

Getting Additional Classification

Additional classification is allowed if you have an existing license. You can add any of the three above classification to the already existing license, provided you have the skill set for the intended additional category and meet the examination requirements. You may also remove a classification from your license if you feel it is no more needed. Keep in mind that to re-add a removed classification to your license, you will need to reapply for it with a fee.

Other Licensure Application Types

Apart from the above three classes, there are other trades that require certifications. If you perform any of the following along with your specialization, you will need to get them, more like additional classification to your existing license:

-       Home Improvement Salesperson (HIS)

-       Asbestos Contracting Works

-       Hazardous Substance Removal and Remedial Actions Work