Any construction project worth more than $1,000 must be performed and managed by a licensed contractor. A license is obtained through the Virginia Department of Professional and Occupational Regulation (DPOR), but it involves more than simply filling out a form. This article briefly outlines what to expect from the licensing requirements for construction contractors.
Even if you are working alone, you must first register as a sole proprietorship or LLC with the Virginia State Corporation Commission before you can apply for a license. As you are applying for the license, you must disclose your “responsible management” (officers, members, or partners) to DPOR.
Once you have registered your business, you can begin considering what class of license you will need. DPOR breaks down licenses into three classes—A, B, and C—and several classifications and specialties, each with their own eligibility requirements. For instance, businesses applying for a Class C license must appoint a “qualified individual,” who must be 18 or older, either a full-time employee or member of the company’s management, and must have a minimum of two years of experience in the relevant classification or specialty. Depending on the specialty, the qualified individual may also have to possess a separate license or certification (like a Tradesman license) or pass a test. Eligibility requirements for Class A and B licenses are more demanding. In addition to a qualified individual with at least three to five years of relevant experience, applicants must also appoint a representative to attend a pre-license education course and a “designated employee” who must pass an additional examination before the license is issued. Class A and B licenses are also restricted to businesses that have a minimum net worth of $45,000 and $15,000 respectively, which should be reflected by the business’s financial history, which includes debts and judgments, that must be submitted to DPOR.
Eligibility requirements for each class vary because the license classes dictate the size of the construction projects you can take on. For example, a Class C license only allows you to take on projects that are less than $10,000 and does not allow you to take on more than $150,000-worth of projects in a single year. On the other hand, a Class A license, does not have any maximum project value caps.
Similarly, the license classification or specialty dictates what kind of work you can perform. For example, the “commercial building contractors” (CBC) classification permits “construction, remodeling, repair, improvement, removal, or demolition” on commercial property, but to do plumbing or electrical work, a business would have to register under the “plumbing contractors” (PLB) or “electrical contractors” (ELE) classification. The same is true for “residential building contractors” (RBC), who build homes, “HVAC contractors” (HVA), and “highway/heavy contractors” (H/H), who perform road work and demolition. In addition to these classifications, DPOR has identified over 40 unique specialties from “accessibility services contracting” (ASC), to “water well/pump contracting” (WWP). Fortunately, one license can cover several specialties as long as you have a “qualified individual” for each one.
DPOR recommends completing a license application in the following order:
1. Register your business with the State Corporation Commission
2. Determine what kind of license class and specialties you will need
3. Identify your business’s members or governing management
4. Appoint your qualified individual(s)
5. Appoint your designated employee(s) and complete the exam
6. Complete the pre-license education course
7. Complete the application and submit with the application fee
Let us help you choose the right license for your business and guide you through the application process so you can become a licensed contractor and be protected both legally and administratively in your future projects.