What’s Next After Passing Your Contractor Licensing Exam?
You’ve done all the preliminary work. You have taken the exam and passed. You just cleared one of the biggest hurdles toward your own contracting business. Now what? This guide shows you the next steps.
Applying for a License
Although getting your application accepted for the licensing exam and then taking it means that you are almost done with the process, there are a few other tasks you need to complete in order for your licensing application to be accepted. This is your opportunity to make sure all your paperwork is in perfect order, so that your application will pass through with minimal complication.
Fees and Deposits
Each time you apply for a new license or to renew it, you have to pay a $200 licensing fee. This fee will cover your license for two years, and is not the same as the application fee you paid before you took the exam. You may also have to make a deposit of $15,000, or verify that you have obtained a contractor bond. In some cases, the qualifying person getting the license also has to get a bond of $12,500.
Bonds
Simply put, bonds act as an added guarantee for a contractor. Obtaining a bond protects you as the licensed contractor, the company you work for, and the agency that issued the bond. The California State Licensing Board does not issue bonds. Instead, you will get a bond from your insurance agent or from another private holding company that offers them. You pay to maintain the bond for a certain amount of time, which is often 1-3 years. Afterward, you might have to pay to renew it. Some people can avoid obtaining various kinds of bonds, but they have to use an approved alternative instead.
Fingerprinting
Before you take the exam, you have to get fully fingerprinted and complete a background check through the CSLB. This process confirms that your background does not present any barrier to you holding a contractor’s license and working in the field. When you finish this step, you get three copies of your request. You give one to the person performing the scan, one for your own records, and submit the last with your licensing application.
Confirmation of Asbestos Open-Book Examination
Each person who applies for a contractor’s license in California has to pass an open-book test on asbestos. This exam just serves to prove that you have an understanding of what to do with asbestos if you find it during your normal operations. The test is different from any certification you might obtain for asbestos abatement. You include the verification that you passed this exam along with your application.
Workers’ Compensation Concerns
Workers’ Compensation Insurance provides some protection for your employees if they are injured while they are on the job. As a general rule, you are expected to show evidence that you keep this insurance, with a few possible exceptions. For example, if you have no employees, you may be able to file an exemption from paying for the insurance. Some people are allowed to self-insure instead of purchasing a policy. These exemptions apply to many contracting fields, except C-39, for roofing contractors.
LLC Bonds and Insurance
Many contractors decide to form a limited liability company (LLC) when they start a contracting business. LLCs can help to protect your personal assets from liability, if your business has financial problems that exceed your ability to manage them. In addition to other bonds and insurance, LLCs must get an employee/worker bond to cover unpaid wages and benefits. You must also show that you have a liability insurance policy for your LLC.
Once you have all these forms completed and ready to go, you can submit your licensing application. You will receive an application number and a personal identification number so that you can check the status of your application online. Once your application is accepted, you will receive your license. To get started on your contracting career today, contact us at CSLS!
