How to Get a North Carolina Contractors License
The state of North Carolina offers a variety of contractors licenses. These include general and specialty licenses such as electrical, landscape, plumbing, heating and fire sprinkler licenses.
Different types of licenses are issued by different licensing bodies. As a result, the application process and licensing requirements can vary significantly between professions.
For some licenses, such as general, electrical and landscape contractors licenses, there is a statewide requirement to obtain a North Carolina contractors license bond. While for others, such as plumbing and heating licenses, there are city requirements.
Read on for more information on how to get any type of contractors license.
Types of North Carolina Contractors Licenses
The state of North Carolina issues various licenses for contractors. The exact license issued will depend on the type of work being carried out. Because each license classification is different, it’s essential you apply for the correct license before you start work.
General Contractors License
To perform work as a general contractor on projects that cost $30,000 or more, you must obtain a license from the North Carolina Licensing Board for General Contractors. The types of licenses issued by the board are:
- Public utilities
- Specialty (features about 17 types of specialty licenses)
Additionally, all of these licenses are issued for three different classifications:
The type of classification you obtain will depend on your working capital. These classifications allow contractors to work on projects that have a particular cost but not on projects above that cost.
Electrical Contractor License
To obtain a North Carolina electrical contractors license you’ll need to apply to the State Board of Examiners of Electrical Contractors. The board issues 10 classifications of electrical contractor license. These include the limited, intermediate and unlimited classifications that allow contractors to perform residential, commercial and industrial work on different scales.
The board further issues a license that permits electricians to work on single-family detached residential dwellings.
Finally, there are six special restricted electrical contracting classifications that only allow for a limited scope of contracting work to be performed. These are the:
- Fire alarm/low voltage
- Plumbing, heating, and air conditioning
- Groundwater pump
- Electric sign
- Swimming pool
Landscape Contractor License
Landscape contractor licenses in North Carolina are issued by the NC Landscape Contractors’ Licensing Board. The board issues two types of licenses: individual and corporate.
According to the North Carolina General Statutes (N.C.G.S.§89D-11 (3)), a landscape contractor is anyone who:
“[…] for compensation or other consideration, does any of the following: a. Engages in the business requiring the art, experience, ability, knowledge, science, and skill to prepare contracts and bid for the performance of landscape services, including installing, planting, repairing, and managing gardens, lawns, shrubs, vines, trees, or other decorative vegetation, including the finish grading and preparation of plots and areas of land for decorative utilitarian treatment and arrangement.”
Plumbing, Heating and Fire Sprinkler Contractors License
Finally, the state of North Carolina issues licenses for plumbing, heating and fire sprinkler contractors. It also issues fuel piping licenses. These are issued by the State Board of Examiners of Plumbing, Heating and Fire Sprinkler Contractors.
There are a variety of licenses in each of these categories. The main distinctions between them being that Class I licenses cover systems for all types of buildings, while Class II licenses are limited to single-family detached dwellings only.
Who Needs a North Carolina Contractor License?
According to North Carolina General Statutes § 87-1(a), all contractors who wish to perform work on projects worth $30,000 or more must obtain a contractors’ license.
If you’re working on projects worth less than $30,000, you aren’t required to apply for a general contractor license. However, becoming a licensed contractor can make you look more professional, reassure your clients and help you to secure future work.
License Limitations and Classifications
Before you can start the license application process, you’ll need to determine your license limitation and classification.
The NC Licensing Board for General Contractors defines limitations as the total value of the projects that you can undertake with your license. There are three levels of license limitations in North Carolina: limited, intermediate and unlimited.
A limited license allows you to perform work on projects worth up to $500,000. In order to obtain this type of license, you must have at least $17,000 in working capital, a net worth of $80,000, or a contractor license surety bond of $350,000.
An intermediate license allows you to perform work on projects worth up to $1 million. To be eligible for this license you must have at least $75,000 in working capital or a $1 million surety bond.
An unlimited license authorizes you to perform work on projects of any value. To obtain this type of license you’ll need at least $150,000 in working capital or a $2 million surety bond.
General contractor licenses are also certified in one of the following five classifications under 21 NCAC 12A.0202. These classifications determine the type of work you can perform:
- Building contractor – building construction and demolition projects
- Residential contractor – residential building construction and demolition projects
- Highway contractor – highway construction projects
- Public utilities contractor – water and wastewater projects
- Specialty contractor – projects in specialty trades such as roofing or others
North Carolina Contractors License Requirements
To get any of the above licenses, applicants will need to apply at the respective State Board. This can be done by submitting the relevant application form, passing a qualifying contractor exam and, in some cases, submitting financial requirements such as a surety bond.
Application fees for a North Carolina contractors license are as follows:
- General contractors license – $75 for a limited, $100 for an intermediate, and $125 for an unlimited license classification
- Electrical contractor license – $85 for a limited, $130 for an intermediate, and $180 for an unlimited license classification
- Landscape contractor license – $75 application fee, and a $60 licensing fee
- Plumbing, heating and fire sprinkler contractors license – $75 fee for a fire protection sprinkler contractor’s license, $150 for a plumbing/heating license, and $300 for a fire sprinkler license
When applying, you’ll be required to pay examination fees which differ from license type to license type. Once you pass your license exam and your application is approved by the board, your license will be issued.
If you’ll be applying for an electrical or landscape contractors license, see below for more information regarding the surety bond requirements.
Surety Bond Requirements for North Carolina Contractors
To get licensed in North Carolina, general, electrical and landscape contractors are required to obtain a surety bond. This is a statewide requirement that applies to all contractors.
Apart from this requirement, the cities of Winston-Salem and Greensboro require certain applicants to get bonded. The bond requirements for all of the above license types are as follows.
In all of North Carolina, general contractors must provide:
- A $350,000 bond when applying for a limited license
- A $1,000,000 bond when applying for an intermediate license
- A $2,000,000 bond when applying for an unlimited license
Electrical contractors who apply for intermediate and unlimited license classifications must provide a $50,000 bond for the former and a $130,000 bond for the latter.
A $10,000 NC landscape contractor bond is required of all applicants for a landscape contractor license.
A $2,000 surety bond is required of all applicants in the city of Greensboro for an electrical, plumbing, heating, air conditioning, mechanical, refrigeration, HVAC and concrete contractor license. Contractors who perform demolition, grading and house moving in the city, must post a $5,000 bond.
In the city of Winston-Salem, heating and electrical contractors must post a $2,500 bond. Street, bridge, and sidewalk contractors must post a $20,000 bond.
The reason contractors are required to obtain a bond is to guarantee that they will comply with state and city laws and regulations. If contractors violate these regulations, a claim can be filed against the bond and claimants can be compensated for any damage or loss they experience due to violations.
Determine the license limitation and classification you require
Take and pass the relevant NASCLA exam
Prepare an audited financial statement for your company
Apply for and secure your surety bond
Choose your legal entity structure and register your business with the North Carolina Secretary of State
Apply for a Federal Employer Identification Number (FEIN) from the Internal Revenue Service (IRS).
Submit your application and pay your license fee
How Much Does it Cost to Get a North Carolina Contractor License Bond
Often, the terms ‘bond amount’ and ‘bond cost’ are confused, and people worry that they’ll need to pay thousands of dollars to get bonded.
The amount of the bond is not the same as the cost of the bond. The bond amount is the total value of the bond you require. The bond cost is a fraction, a small percentage of this sum. It’s the bond cost that you’ll need to pay in order to get bonded. The bond cost, also known as the bond premium, is based on the personal credit score of the applicant – the higher the score, the lower the bond rate.
For example, if you apply for the $50,000 electrical contractor bond and are given a 1% rate on your bond, you’ll need to pay $500 to obtain the bond. Rates for high credit score applicants may vary depending on the bond type, but are generally between 1% and 3% of the bond amount.
How Much Work Can You Do Without a Contractor License in North Carolina?
If you don’t have a contractor license in North Carolina, you’ll only be able to work on projects worth up to $30,000.
Is There a Difference Between Applying as a Qualifier or Licensee?
The licensee is the person that has met all the requirements for the license, while the qualifier is defined as the owner of the licensed entity, officer, or individual responsible for managing employees
Do You Have to Take a Licensing Exam to Obtain a NC General Contractor License?
All applicants are required to take an exam as part of the licensure process.
How Hard Is the NC General Contractor Exam?
The NC general contractor exam requires an in-depth knowledge of the building code, experience in construction activity and an all-round understanding of the industry. There are courses you can take to prepare you for the exam. Find out more at nclbgc.org.
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