Before setting up a general contractors business in Fresno, people need to meet all the California licensing requirements. This ensures that the Fresno construction business they open is legal and a safe place for employees. People can only get a general contractors license via an authorized government agency and view general contractors license requirements via the Ca Dep of Consumer Affairs.
Under California law, any construction or alteration jobs that cost more than $500 in materials and labor must have a general contractor’s license. They should also get the license if they are in any of the following categories;
• Highway construction or repair
• Building renovation, repair, or construction
• Railroad construction or repair
• Parking facility renovation, repair, or construction
• Excavation work
However, applying for the license can be a very challenging task and could take a long time, delaying the business’ starting date. However, understanding all the requirements and steps for the process makes it easier.
Step 1: Understanding General Contractors License Requirements
Understanding the requirements before people start the application process makes the whole process easier and faster because they already know what they are expected to do or have.
People can get a contractor’s license in Fresno if they are qualified individuals, have a partnership, LLC, or corporation in Fresno construction.
To become eligible for the license, a person has to be over 18 years, have the essential skills and experience necessary to run a Fresno construction safely, and have a valid social security number.
They also have to have proof of the four years’ professional experience they had within the last ten years as a foreman, contractor, supervising employee, owner-builder, or journeyman contractor so that they can take the state examination.
Depending on the school and program a person completed, The California Contractors State License Board can give them credit for an apprenticeship, education, or training. If a person has the qualifying scholastic experience and/or training, they need to have their official transcripts.
Generally, people can receive credit for related technical training, education, and vocational training for up to;
• Three years for having a certificate of completion of apprenticeship gotten from a recognized apprenticeship program.
• Two years for a four-year degree in architecture, accounting, economics, business, physics, or mathematics.
• 1 ½ year if they have an associate of Arts degree gotten from a recognized university.
If someone does not meet all the requirements, they can look for someone who does. They can then apply for the license and become the business’ representatives.
Step 2: Applying, Planning, And Studying For The Exams
Once someone has ensured that they meet all the above requirements, the next step is to apply for the exam. To start, the person needs to fill in the Application for Original Contractor’s license. They have to ensure that they fill in all the required information and proofread the application.
Finally, they have to send the application and a $330 application fee to the CLSB headquarters. The address of the headquarters is:
P.O. Box 26000, Sacramento, CA 95826
Once the CLSB accepts the exam application, the next thing a person needs to do is sign up for a test in the closest testing center. Afterward, the testing center will send a Notice to appear for the examination via mail.
The notice explains the date, time, and location of the test, plus all the identification requirements a person needs to bring to the test.
Exams normally come in two parts. The first part is the standard Business and Law exam, which all participants must pass. These exams come in multiple-choice questions, and they cover areas like Bid Preparation, Business Practices, Contract Operations, Contracts, Labor, Legal, and Safety.
Then, if a person wants to become a specialty contractor in any specific industry, they must take a second trade exam and pass it too.
Some of the resources that applicants can use to study for the exam include;
• California contractors’ license law and reference book
• Exam study guides
• Business and law study guides
If an applicant takes their exams in a contractor school, most schools provide them with reading materials, course reviews, and sample test questions to help them prepare.
Some schools even guarantee that if the applicants pass the exams during their first take, they could refund their tuition fee.
Step 3: Getting The Contractor License
Once applicants have passed the exam, the testing site sends them a fee and contractor bond notification. This notifies them of the things they need to send to get their general contractor’s license.
While the requirements may vary, some of the basic ones include;
• A $200 initial licensing fee.
• A $15,000 cashier’s check or contractor license bond.
• If applicable, a $12,500 bond of qualifying individual.
• Worker’s Compensation Insurance certificate.
• A filed asbestos open-book examination.
• Fingerprints submitted through Live Scan. Normally, the CLBS sends instructions for this.
• If the applicant does not have employees, they need to submit evidence of exception from insurance for workers’ compensation.
• If applicable, worker or LLC employee bond.
• If applicable, LLC liability insurance.
Once the applicant has submitted all the requirements, they also need to show proof that they have operating capital of over $2,500. After that, they will receive their contractor’s license, and they will almost be ready to start their business.
The time it takes people to get their contractor licenses could differ. However, the longest time is when waiting for approval to take the exam. This could take weeks, but if an applicant qualifies for an exam waiver, it makes the waiting time shorter.
However, after taking the exam, the process is quicker because applicants can get the results within 24 hours of taking the test. After that, it takes around two weeks to get the license, depending on how fast the applicant sends the requirements.
Step 4: Getting A Liability Insurance
Normally, it is not a legal requirement that contractor businesses have any other insurance besides workers’ compensation and commercial liability auto insurance. However, operating a general contractors Fresno CA business without general liability insurance is a great risk.
This insurance offers protection against financial damages that third parties incur from business operations. Typically, it helps the business investigate, defend, and settle claims relating to;
• Advertising and personal injury
• Property damage
• Bodily injury
Having liability insurance is also a great way that a general construction company can win over clients because it assures them of safety.
One question many new contractor business owners may wonder is where to get their liability insurance covered. Many insurance companies offer this type of insurance.
However, the applicant needs to consider things like price, deductibles, and claim process from different insurance companies. They also need to consider the requirements they need to meet to qualify for the cover, and the policy will cover and not cover.
That way, they can choose an insurance policy that will not only be affordable but also meet all their business insurance needs.
Penalties For Operating A Contracting Business Without A License
Like in running other businesses, contracting business owners can face penalties if they run their business without a license.
Under California law, a contracting business that operates jobs that incur over $500 in labor and materials without a license could face penalties and fines that fall under two categories.
First-time offenses: This could attract a jail time of six months, and an administrative fine of up to $15,000, and a $500 fine.
Subsequent violations: If a business operator is given a subsequent conviction, they face at least 90 days in jail and a fine which could either be $4,500 or 20% of the whole value of the job they were working on.
After receiving the license and starting business operations, the business owner must renew their licenses after every two years. The renewal process is fast and costs $450. Failure to renew the license could also attract penalties and fines.
An updated license, just like liability insurance, is also a great way for a contracting business to win over customers because it assures them of the legality of the business and the qualifications of the employees.