How to Get an Arizona Contractor License
Considering a contracting business in Arizona? First and foremost, you will have to obtain an Arizona contractor license, so that you are allowed to operate legally in the state.
If you want to work on residential or commercial projects involving construction, repairing, improving and demolishing of buildings, highways, roads or other construction structures, you need to get licensed with the Arizona Registrar of Contractors. Among the list of license requirements, you need to get a contractor license surety bond, which guarantees your compliance with state rules.
The licensing process is rigorous and it’s best to get acquainted with it before you set off to start your contracting business. Let’s review the main steps you need to fulfill.
Identify the type of Arizona contractor license you need
The Arizona Registrar of Contractors has split the different types of licenses in a detailed system of license classifications. Depending on the exact nature of the work you would like to engage in, you will need a different license.
The main license classifications are:
- Commercial engineering contracting (with 12 subclassifications)
- General commercial contracting (with 2 subclassifications)
- Residential contracting (with 6 subclassifications)
- Specialty residential contracting (with 16 subclassifications)
- General dual engineering contracting (with 4 subclassifications)
- General dual license contracting (with 3 subclassifications)
- Specialty dual license contracting (with 48 subclassifications)
- Specialty commercial contracting (with 15 subclassifications)
As you can see, you need to carefully consider the different classifications and subclassifications and make sure to choose the one that matches your intended activities.
Meet the Arizona contractors license requirements
After you have selected the correct license classification for your needs, you need to complete an Arizona contractors license application. Together with the duly filled form, you need to submit a range of additional paperwork.
The main documents you need to present include:
- Required examinations for your license classification – passed with at least 70% success
- Legal entity registered with the Arizona Corporation Commission
- Employer Identification Number from the IRS
- Notarized documents proving your professional experience
- Financial statements
- Background check
- Payment of application and license fees
- Worker’s compensation insurance
- Contractor license bond in the appropriate amount
The license fees and the contractor license bond amounts will vary according to the license classification you have chosen. You can indicate the exact license type in the application form.
Get an Arizona contractor license bond
One of the main requirements for getting your Arizona contractor license is to post a surety bond. The purpose of the bonding is to provide a safety net for the state and for your customers, so it works in a very different way than insurance. It guarantees that you will abide by all applicable rules. In case you transgress from them, an affected party can file a claim and get reimbursed for any losses.
In the case of Arizona, the contractor license bond amount is set on the basis of the license classification you need and your gross volume of work in the state. You can review the exact bond amount that you have to post. As it becomes apparent, the bond requirement can be anywhere from $2,500 to $100,000.
Even if the bond amount you need to obtain is considerable, it’s important to understand how your bond price is set. You don’t have to pay the full amount, but instead, only a few percents of it. For standard bonding market applicants, this means a bond premium in the range of 1%-2.5% of the bond amount.
When you apply for the bond, your surety provider will examine your personal and business finances. This includes your credit score, assets and liquidity and business financials. If your status is deemed as solid, you can expect a lower bond premium, as your bond application is not seen as risky.
If you are ready to start your licensing and bonding process, you can complete a surety bond application form online today. You can also reach us at 877.514.5146 or [email protected] if you need further information or assistance from our bonding experts.