How to Get a Contractor’s License in California: Your Blueprint to Construction Business Success!
Are you ready to start your own contracting business in California? The first question you need to ask is: “how to get a contractor’s license California?” The process may seem daunting, but with the right guidance, you can successfully navigate the requirements and become a licensed contractor.

In this article, we’ll guide you through the step-by-step process of obtaining a contractor’s license in California, from understanding the requirements to submitting your application and taking the licensing exam.

To obtain your California contractor license, you must have four years of verifiable experience, choose the right type of license, obtain liability and worker’s compensation insurance, and secure a surety bond. Additionally, you must complete a state-approved education program and pass the licensing exam.

While the process may seem overwhelming, remember that having a licensed contractor comes with many benefits, including increased credibility, the ability to bid on larger projects, and protection for both you and your clients.

So, let’s get started on your journey to becoming a licensed contractor in California.

What are the Requirements for a California Contractor License?

If you’re ready to take the next step and obtain your California contractor license, it’s important to understand the strict requirements.

How to get a contractor’s license in California

To start, you’ll need to have four years of experience in the field, including field supervision, foreman, supervisor, or contractor in the specific classification you’re applying for. Additionally, you must be at least 18 years old, have the necessary skills to manage the daily activities of a construction business, and secure a $25,000 bond to protect consumers against defective craftsmanship and employees from non-payment.

The California contractor license is a crucial requirement for any contractor looking to work on contracts over $500 in the state.

What processes are required to obtain a California Contractor License?

The licensing process in California involves filling out an application, passing an exam, submitting supporting documents, and securing a bond.

All contractors must hold a contractor license bond, and two additional bonds may be required: a Bond of Qualifying Individual and an LLC Employee/Worker Bond.

What are the Steps to Become a Licensed Contractor?

• The first step in becoming licensed in California is to determine that you’re eligible and fill out the necessary application. Once your application is accepted, you’ll receive a fingerprinting packet, and the exam notice should arrive within three weeks. The California Contractors License Board or California State Licensing Board (CSLB) may provide credit in the form of work experience for up to three years for vocational training or an applicable apprenticeship.
• Completing a state-approved education program is the next step in the licensing process. Private schools with California’s Bureau for Private Post-Secondary Education (BPPE) and community colleges with a construction program near you can be researched. Official CSLB examination study guides are available free of charge on CSLB’s website and are mailed to applicants when they are scheduled for exams. Note that the licensing exam covers law and business and trade-specific knowledge, so it’s essential to prepare thoroughly.
• After completing the education program, you can register for the examination and prepare for the test.
• The next step is to complete a state-approved education program. It’s crucial to prepare for the examination thoroughly, as passing the exam is necessary to obtain a California contractor license. Once you’ve completed the education program and passed the exam, you’ll be one step closer to obtaining your California contractor license.

Completing a State-Approved (CSLB) Education Program

Completing a state-approved education program is a crucial step toward meeting the stringent requirements for becoming a licensed contractor in California. The California State Licensing Board (CSLB) requires all applicants to complete a state-approved education program before taking the license exam.

This education program will consist of courses that cover general contractor license topics such as construction law, business management, and safety regulations. Additionally, there are specific courses for each license classification, such as electrical or plumbing.

The CSLB maintains a list of state-approved license schools that offer courses in-person or online. These courses will provide you with the knowledge and skills necessary to pass the license exam and build a successful contracting business in California. Attending a state-approved license school also allows you to fulfill the education requirement and earn credit towards the four-year journey-level experience requirement.

After completing the state-approved education program, you will be ready to take the general contractor license exam. The exam will cover both business and law topics, as well as trade-specific knowledge for your license classification. Passing the exam is a crucial step toward obtaining your contractor license, and it requires careful preparation and study.

Preparing for the Contractor License Exam

The California State License Board (CSLB) requires all applicants to pass a contractor license exam to demonstrate their knowledge of the trade and business. The exam is divided into two parts: the law and business portion and the trade-specific portion.

The law and business portion covers topics such as labor laws, contract requirements, and business practices, while the trade-specific portion focuses on the skills and knowledge required for your specific license classification. To prepare for the contractor license exam:

• You should review the CSLB’s official study guide and take practice exams.
• You can also enroll in a licensing exam preparation course offered by private schools or community colleges. These courses can provide you with additional study materials and give you the opportunity to ask questions and learn from experienced instructors.
• Dedicate enough time to study and practice before the exam to ensure that you’re fully prepared to pass.
• To take the contractor license exam, you’ll need to pay a license fee and schedule your testing appointment with the CSLB. The fee for the exam varies depending on your license classification, but it typically ranges from $60 to $300.
• You’ll also need to provide documentation of your work experience and education, as well as pass a criminal background check and provide fingerprints.

Now that you’re ready to take your contractor license exam, it’s important to consider liability and worker’s compensation insurance. These types of insurance protect you and your business from financial risks and legal liabilities. The CSLB requires all licensed contractors to carry liability insurance, and workers’ compensation insurance is required for all contractors who have employees. Research your insurance options and obtain the necessary coverage before starting your contracting business in California.

Applying for Liability and Worker’s Compensation Insurance

When you apply for liability and worker’s compensation insurance, you can protect yourself and your business from financial risks and legal liabilities in California. As a contractor in California, you’re required to carry liability insurance to cover damages or injuries that may occur on a job site.

Additionally, worker’s compensation insurance is required for all contractors with employees, including subcontractors. This insurance provides coverage for medical expenses and lost wages in case an employee is injured on the job. To obtain liability and worker’s compensation insurance:

• You need to work with a licensed insurance broker or agent. They’ll help you find the right coverage for your business and ensure that you meet all the legal requirements.
• You’ll also need to provide information about your business, such as the number of employees and the type of work you do. Keep in mind that insurance premiums can vary depending on the level of risk involved in your business.
• Unlicensed contractors aren’t eligible for surety bonds or contractor license bonds. These bonds are designed to protect consumers from financial harm caused by the contractor’s actions. As a licensed contractor, you can obtain a contractor license bond, which serves as a guarantee that you’ll comply with all the laws and regulations governing your work. This bond is required for all licensed contractors in California.

Obtaining liability and worker’s compensation insurance is a crucial step in becoming a licensed contractor in California. By working with a licensed insurance broker or agent and obtaining the necessary bonds, you can protect your business from financial risks and legal liabilities. Once you’ve obtained insurance and bonds, you can move on to the next step of choosing the right type of contractor’s license.

How do I choose the right type of California contractor license?

Picking the appropriate type of contractor’s license is a crucial decision to make when starting a construction business in California. There are four general types of contractor licenses to choose from, including the Class A General Engineering Contractor License, Class B General Building Contractor License, Class B-2 Residential Remodeling Contractor License, and Class C Specialty Contractor License.

The California Contractors License Board (CSLB) requires applicants to choose the appropriate license based on their type of work. If you plan to work on projects that involve multiple trades, the Class B General Building Contractor License may be the best fit. It allows you to work on a wide range of projects, including residential and commercial construction, while the Class A General Engineering Contractor License is suitable for those who work on large-scale projects, like highways and bridges. If you specialize in one area, like painting or landscaping, the Class C Specialty Contractor License may be the right choice.

The experience requirement for each type of contractor’s license varies. The Class A and B licenses require four years of experience as a journeyman, foreman, supervisor, or contractor in the classification the applicant is applying for. The Class B-2 Residential Remodeling Contractor License requires two years of experience in the same classification. The Class C Specialty Contractor License doesn’t have a specific experience requirement, but applicants must demonstrate the skills necessary to perform the work they’re applying for.

Now that you know the general contractor license requirements and the type of California contractor license that’s right for your business, you can move on to the next step: registering your business with the state.

Registering Your Business with the State

Congratulations! You’re ready to take the next step in launching your construction business by registering it with the state. Here are five things you need to know about registering your business with the Contractors State License Board (CSLB) in the state of California:

• You must have a qualifying individual for your business. This person must have at least four years of experience in the classification for which you’re seeking a license. They’ll be responsible for managing the day-to-day activities of your construction business.
• You’ll need to choose a business structure. Your options include sole proprietorship, partnership, corporation, or limited liability company (LLC). Each structure has its own advantages and disadvantages, so it’s important to do your research and choose the one that’s right for your business.
• You’ll need a business name and a license number. Your business name must be unique and not already in use by another registered business in California. Your license number will be assigned by the CSLB once your application has been approved.
• You’ll need to provide documentation to support your application. This includes your qualifying individual’s certification of work experience, disclosure statements regarding criminal pleas or convictions, and proof of workers’ compensation insurance for your business.
• The application fee for registering your business with the CSLB is $300. You’ll also need to pay a $200 initial license fee once your application has been approved.

The next step is obtaining a surety bond.

How do I obtain a surety bond for my California contractor license?

A surety bond is a contract between three parties:

• The obligee (your client)
• The principal (you, the contractor)
• The surety (the insurance company issuing the bond).

It ensures that you will fulfill your contractual obligations, and if you don’t, the surety will pay out to the obligee.

To obtain a contractor bond in California, you’ll need to provide proof of financial responsibility, such as a personal financial statement or a line of credit. The bond amount required by the California State Licensing Board (CSLB) is $25,000 for all contractors except for those in the C-38 Refrigeration classification, which requires a $5,000 bond. You can obtain a bond from a surety company authorized to do business in California.

In addition to the contractor bond, the CSLB may also require a Bond of Qualifying Individual for each responsible managing employee or officer listed on your license application. This bond ensures that the qualifying individual will supervise all construction operations and comply with state law. The bond amount required is $12,500 for the first responsible managing officer and $7,500 for each additional responsible managing employee or officer.

Once you have obtained your surety bond and any other required bonds, you can submit your license application to the CSLB. The licensing program is designed to ensure that contractors meet the minimum qualifications and have the necessary skills to operate a construction business. The next step is to prepare for and pass the licensing exam, which covers both law and business and trade-specific knowledge.

Now that you have obtained your surety bond, it’s time to move on to the next step of obtaining your contractor’s license in California. The licensing process can be challenging, but with the right preparation and documentation, you can successfully navigate it. The next step is to submit your license application, which includes providing proof of your experience and skills, as well as any required bonds.

Submitting Your General Contractor License Application

Before you can begin the process of submitting your license application, it’s important to gather all necessary documentation and ensure that you meet the minimum qualifications set forth by the CSLB. As a reminder, you must be 18 years or older, have four years of verifiable experience in the classification you’re applying for, and secure a $25,000 bond to protect consumers against defective craftsmanship and employees from non-payment. Once you have met these requirements, you can proceed with the general contractor license application process.

To start your application, you’ll need to choose the appropriate general contractor license classification for your business. As previously mentioned, there are four general types of contractor licenses in California: Class A General Engineering Contractor License, Class B General Building Contractor License, Class B-2 Residential Remodeling Contractor License, and Class C Specialty Contractor License. Once you have selected the correct license, you can fill out the application online or order a paper application.

After submitting your application, the CSLB will review it and send you a fingerprinting packet. You must submit fingerprints as part of a background check, which is required for all contractor licenses in California. The exam notice should arrive within three weeks of the CSLB accepting your application. Once you receive the notice, you can schedule your exam and start preparing.

Submitting your California contractor license application is the next step in obtaining your contractor license in California. Make sure you have all necessary documentation and qualifications before applying, choose the appropriate license classification, and submit your application online or by mail. After submitting your application, you’ll need to submit fingerprints and schedule your exam. Speaking of which, the next step in the process is taking the licensing exam.

How can applicants prepare for the California contractor license exam?

Once you’ve submitted your application and scheduled your exam, it’s important to prepare thoroughly for the California contractor license exam.

The trade exam covers topics specific to the license classification you’re applying for, such as general building contractor, and the law and business exam covers general business practices and California construction law. To prepare for the exam:

• You can use study guides provided by the CSLB or attend instruction schools. Note that the exam is only available in English, so if you’re not fluent, you may want to consider hiring a translator.
• On the day of the exam, arrive early and bring a valid government-issued photo ID, such as a driver’s license or passport. You’ll have three and a half hours to complete both the trade and law and business exams.
• To pass the exam, you’ll need to score at least 73% on the trade exam and 72% on the law and business exam. If you don’t pass, you can retake the exam, but you’ll need to pay the exam fee again.
• If you pass, you’ll be issued a license in good standing, which you’ll need to renew every two years. Once you have your license, you can start your own contracting business in California. This can be a challenging but rewarding endeavor.

You’ll need to establish a business plan, obtain insurance and bonding, and market your services. With hard work and dedication, you can build a successful business and make a name for yourself in the California construction industry.

Starting Your Own Contracting Business in California

Starting your own contracting business in California can be a challenging but rewarding endeavor, and with hard work and dedication, you can build a successful business and make a name for yourself in the construction industry.

However, before you can start your business, you need to get a California contractor’s license. As a general contractor, you will need to have a Class B or Class A license, depending on the type of work you plan to perform. To start your contracting business:

• You will need to follow California law and obtain a contractor license. This includes completing the necessary education and work experience requirements, submitting an application, passing an exam, and obtaining a California contractor license bond.
• Once you have your California contractor license, you can start your contracting business and begin bidding on projects. As a general contractor, you will be responsible for managing all aspects of your business, including bidding on projects, managing employees, and overseeing construction projects.
• You will also need to comply with California law, which includes obtaining insurance, maintaining a safe work environment, and following all building codes and regulations.
• In addition to obtaining a general contractor license and following California law, it’s important to build a strong reputation in the industry. This means providing quality work, being reliable and trustworthy, and delivering projects on time and within budget.

By building a strong reputation, you can establish a loyal customer base and grow your business over time. Starting your own contracting business in California can be challenging, but with hard work and dedication, you can build a successful business and make a name for yourself in the construction industry.

Frequently Asked Questions:

Who must be licensed as a contractor?

Any construction work that costs $500 or more in labor and/or material must be done by a state-licensed contractor. It is illegal to divide a job into smaller parts to get around the $500 limit. Contractors, including subcontractors, specialty contractors, and people engaged in the business of home improvement must be licensed before submitting bids.

Who Does CSLB License?

CSLB issues licenses to five types of business entities:

• Sole Owners
• Partnerships
• Corporations
• Joint Ventures
• Limited Liability Companys (LLCs)

How do I apply for a contractor license for my corporation?

1. Before submitting your application for a contractor’s license, get information on the rules and regulations for contractors. Are you exempt? What is your particular industry and what are the limitations and conditions? What are the penalties?
2. Complete an “Application for Original Contractor License.” You can fill it out on CSLB’s website: www.cslb.ca.gov (search: application) and then print it; or download and print a blank application and complete it using blue or black ink; or request a paper copy at any CSLB office ).
3. If you plan to apply for multiple licenses, you must wait for the initial license to be issued before applying again.
4. Carefully read the general information and follow the instructions included with the application.
5. Identify a qualifier for the license.
6. Be aware that you must submit certifications to support the work experience listed on the application. CSLB will not accept work experience certifications after the application has been reviewed and accepted.
7. Be sure to sign and date the application before sending it in.
8. Proofread the application for any missing information. If CSLB needs to return an incomplete application, the license may be delayed, or the application denied or considered abandoned if corrections are not made within 90 days of CSLB notifying you of the problem.

Who is the qualifier for the license?

The board requires an applicant to show the degree of knowledge and experience in the classification applied for, and the general knowledge of the building, safety, health, and lien laws of the state and of the administrative principles of the contracting business that the board deems necessary for the safety and protection of the public.

A “qualifier” or “qualifying individual” (these terms are used interchangeably) is the person listed in CSLB records who meets the experience and exam requirements for the license. A qualifier is required for every classification on each license CSLB issues.

As to a corporation, it qualifies by the appearance of a responsible managing officer or responsible managing employee who is qualified for the same license classification as the classification being applied for.

Are there any circumstance under which the qualifier does not have to document their experience?

You are not required to document your experience if any of the following conditions exist:

You are currently a qualifier on a license in good standing in the same classification(s) for which you are applying;

You have been a qualifier within the past five years on a license in good standing in the same classification(s) for which you are applying; or

Within the last five years, you have passed both the Law and Business Examination and the trade examination in the same classification for which you are applying, and the license for which you took the examinations was not denied due to lack of work experience.

https://www.cslb.ca.gov/Contractors/Maintain_License/Add_Classification/Qualifying_For_Waivers.aspx

Do I have to take an exam if the qualifier already has a license in good standing?

No. An examination may be waived if the qualifying individual:

is currently, or has been in the last five (5) years, actively engaged in the construction business and meets specific waiver requirements as mandated by law, or has been actively licensed in good standing or has passed the required exams in the classification for which they are applying.

Under what circumstances am I not required to take the examination?

You are not required to take the examination if the qualifying individual meets one of the following requirements:

You are currently a qualifier on a license in good standing in the same classification(s) for which you are applying;

You have been a qualifier within the past five years in the same classification(s) for which you are applying;

Within the last five years, you have passed both the Law and Business Examination and the trade examination in the same classification for which you are applying, and the license for which you took the examinations was not denied due to lack of work experience.

What is the qualifier required to do?

The qualifier for a license must take and pass all required exams, as well as undergo a criminal background check. After the license is issued, the qualifier is responsible for exercising direct supervision and control of the employer’s (or principal’s) construction operations.

What does “Direct supervision and control” mean?

“Direct supervision and control” includes any one or any combination of the following activities:

• supervising construction
• managing construction activities by making technical and administrative decisions
• checking jobs for proper workmanship
• direct supervision on construction job sites

Who can be a qualifier for a small business corporation license?

Either of the following may serve as the qualifier:

• A Responsible Managing Officer (RMO); or
• A Responsible Managing Employee (RME).

Who can be a qualifier for a limited liability company license?

• A Responsible Managing Member,
• A Responsible Managing Manager,
• A Responsible Managing Officer (RMO); or
• A Responsible Managing Employee (RME).

Who can be the Responsible Managing Officer (RMO)?

Every person who is an officer must be listed on the application as an officer of the personnel of record and must match those officers listed on California Secretary of State. Officers are registered with the California Secretary of State through form SI-550 Statement of Information.

The officer positions that are listed with the California Secretary of State will be one of these three roles:

• Chief Executive Officer(CEO)/President,
• Vice President,
• Secretary, or
• Chief Financial Officer/Treasurer

Who can be the Responsible Managing Employee (RME)?

Any a bona fide employee who is permanently employed by the applicant and is actively engaged in the operation of the applicant’s contracting business for at least 32 hours or 80% of the total hours per week such business is in operation, whichever is less.

Can the same person serve as the qualifier for more than one active license?

Yes. But only if one of the following conditions exists:

1. There is common ownership of at least 20 percent of the equity of each firm for which they act as the qualifier; or
2. The additional firm is a subsidiary of, or a joint venture with, the first firm (the parent company must have a CSLB license); or
3. In the case of partnerships, corporations, or LLCs the majority of partners, officers, or members/managers are the same for each firm. Even if one of the above conditions exists, a person may act as the qualifier for no more than three firms in any one-year period.

Will a criminal conviction prevent someone from obtaining a contractor license or serving as a qualifier?

Not necessarily. CSLB may deny a license if the criminal conviction is substantially related to the duties, functions, and qualifications of a contractor. However, even under such circumstances, CSLB may issue a license if the individual has demonstrated sufficient rehabilitation.

Which CSLB Application do I use to apply for a Contractor’s License for my Corporation?

The one that you want to use is the Application for Original Contractor License (Exam Waived). This form is to be used for all business entity types, including limited liability companies, for BPC § 7065 waiver-only applicants (e.g., sole owner applying for a corporate license).

There are currently 2 ways to complete this form:

Easy-Fill:  Fill out the form online, then print. NOTE: This form does not save your answers so you must you complete the form in one step.

PDF:  Print a blank form, then fill it out by hand.

Following the Critical Steps on How to Get a Contractor’s License in California Will Save You Time and Lead to Success

Congratulations! You’ve now completed all the necessary steps to obtain your contractor’s license in California. You’ve chosen the right type of license, completed a state-approved education program, secured liability and worker’s compensation insurance, obtained a surety bond, and passed the licensing exam. You’re now ready to start your own contracting business.

Obtaining a California contractor license can be a challenging process, but the benefits of being licensed are numerous. You’ll have access to a wider range of job opportunities, be able to bid on larger projects, and have greater credibility with potential clients.

Remember, as the saying goes, ‘Rome wasn’t built in a day.’ Becoming a licensed contractor takes time and effort, but the rewards are well worth it. So, go forth and build your dreams!

But if your knowledge and time are limited, you can consult with an accountant, a business consultant, or business attorney to make sure that you comply with all the legal requirements in California.

Incorporation Attorney can provide you with sound guidance on how to get a contractor’s license California and take care of the incorporation process for you. Give us a call right away and let’s get down to business.