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1. Determine Your Requirements
California does not want anyone who calls themselves a contractor to practice without meeting certain requirements set forth by its Business and Professions Code. According to this site, contractors (including subcontractors and specialty tradesmen) must pass an exam, carry certain insurances and bonds, as well as comply with other legal requirements unique to construction.
These regulations ensure contractors possess both knowledge and experience required for safe work practices that adhere to local city ordinances as well as state statutes regarding advertising laws, labor regulations, employee qualifications etc.
Establishing which entity type you will operate under is crucial when starting any new venture: individual, partnership, corporation, Limited Liability Company or joint venture. Your decision could have significant ramifications on filing taxes and obtaining workers’ compensation insurance required by California law.
In addition, independent contractors needing federal employer identification numbers from the Internal Revenue Service can do so to ensure they’re paying payroll and sales taxes correctly withheld from paychecks and sales proceeds.
After this step is completed, all applicable fees are listed on the CSLB website, such as an application fee of $330; live scan fingerprint fees (with DOJ being $32 and FBI being $17) as well as additional test fees that vary based on which licensing classification you’re applying for.
CSLB offers an Easy-Fill Application for Contractors online or via paper copy. Filling this out will require basic information about your company such as its name and address of its principal office; type of business entity such as corporation, limited liability corporation, partnership or sole proprietorship), number of employees in operation and proof of the minimum level of liability insurance required by law.
There are certain instances in which a license may not be necessary, though most contractors must still undergo the licensing process. For instance, if you work as an employee at a licensed contracting company but have no control over project outcomes or aren’t part of owning any part of its business then the CSLB may waive your exam requirement for that class of license.
California contractor licenses can be an arduous task, yet important to any business operating within its borders. California has numerous buildings, roads and structures requiring construction or maintenance by contractors; thus the Contractor Services Licensing Board is committed to helping your trade obtain a license that allows it to flourish within California’s borders. By following the steps outlined here you’ll soon have everything needed for starting and growing a profitable contracting venture in the Golden State of California.
Before beginning to work as a contractor in California, you must pass the licensing exam. This test consists of two parts – Law & Business section and trade-specific section specific to your desired license type. Luckily, California Contractor Services License Board offers study guides that can assist your preparation for this exam with in-depth analyses of test material, sample questions and research resources; its multiple-choice nature makes for a challenging test experience!
Before taking your exam, you will also be subject to a background check and fingerprinting. If you have a criminal background, it is essential that you understand the process for filing for a pardon prior to submitting an application with the CSLB for licensing consideration; they will review your record to decide whether or not you qualify for licensure and it is up to you to make every effort to clear any issues before contracting begins.
Taking the exam requires showing four years of verifiable journey-level construction trade experience or the equivalent combination of education and practical experience. Sometimes the CSLB gives credit for technical training, apprenticeship training or military service instead of part of this required experience.
If you’re ready to launch your own business, there are a few steps you should take first. Registering with the state is always recommended in order to track taxes and ensure compliance with local regulations.
There are various resources available to you when it comes to determining which licenses and permits your business needs. But to walk you through the process, this link: https://www.contractorbond.org/how-to-become-a-licensed-contractor/Website may shed more light on which resources are better. However, one such trusted resource is California Small Business Network.
Offering free one-on-one consultations to new business owners, their team can assist with selecting a name, determining an entity type that fits best, registering their business and getting started with registration procedures.
In addition to the California Small Business Network, there are many other resources available to help you determine which licenses and permits your business needs. You can find information on the websites of your state and local governments, as well as from trade associations and chambers of commerce. You can also consult with an attorney or accountant who specializes in small business law.
It is important to research the requirements carefully and to obtain all necessary licenses and permits before you start operating your business. Failure to do so could result in fines or other penalties.
