Working in the construction field is a lucrative business because it is a field that is in full growth. Know the Steps to Get a Contractor License in Tennessee with Hispanic Entrepreneurs.
When a contractor license is needed
Participating in any construction project that exceeds $ 25.000 requires a contractor's license. The issuance of these is in charge of the Board for Contractor Licenses of the Tennessee Department of Insurance and Commerce.
General contractor licenses are issued for two years and have a monetary limit. In other words, according to the financial statement presented in the application, a limit amount will be assigned for contracting.
Tennessee has a reciprocity agreement with other states. This means that if the interested party has a license in any of these, he does not need to obtain a new one to bid in Tennessee. These states are: Alabama, Arkansas, Louisiana, Mississippi, North Carolina, and South Carolina.
To participate in projects of less than $ 25.000 you need a Home Improvement Contractor License. The counties that require this permit are: Bradley Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby
There is a classification scheme for the allocation of licenses. The following categorization is included in this scheme:
- Building Construction (BC): Includes residential, limited residential, commercial, small commercial and industrial contractor licenses.
- Masonry (LMC): will be required of all contractors and subcontractors participating in projects of more than $ 100.000. To offer in jobs with a lower budget, it can be done with a BC-9 license.
- Specialties (S): includes work such as above ground tank installation, fiber optic erosion control, landscaping, cell towers, building automation, etc.
- Heavy construction (HC): foundation construction and stabilization, demolition of structures, welding, steel structures, among others.
- Highway, Railroad, and Airport (HRA) Construction - Prequalification is required to bid with the Tennessee Department of Transportation. In addition, you must obtain permits from the Department of Environment and Conservation.
- Municipal Utility (MU): Refers to work on underground pipelines, water plants, sewers, drainage, and paving.
- Mechanical (CMC): plumbing, refrigeration, gas pipes, pollution control, sprinklers, fire protection, pollution control, etc.
- Electrical (CE): covers all categories of electrical work for residential, commercial and industrial projects.
Depending on the type of license the contractor chooses, the exams that he must pass to obtain it will be determined.
Steps to obtain the contractor license in Tennessee
Before bid on construction projects it is necessary to obtain the corresponding license. Failure to do so may result in the contractor being penalized and denied permission.
For, apply for contractor license these eight steps must be followed.
Pass the corresponding exams
The contractor must register to present the corresponding exams according to the type of license. Applicants must pass business, law, and, in some cases, trade exams.
Tests are administered by PSI Services and you must pass at least 73% to pass.
Prepare financial statement
As part of the application, a financial statement of the applicant must be prepared, with the help of a public accountant. The document must be reviewed, if the monetary limit is $ 1.500.000 or less, or audited if the limit is greater than that amount.
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The financial statement determines the size of the project to tender. This means that the amount must cover the entire project, including materials and labor.
Reference letters and insurance
A letter of reference from a previous employer or an official who has inspected your work must be attached to the application. The document should speak about the applicant's experience.
Similarly, you must have proof of general liability insurance that includes workers' compensation insurance.
You must register the business with the Tennessee Secretary of State. To obtain the license you can do so as a sole proprietor, corporation, company or limited liability company.
In addition to the registry, you must present documents such as articles of the organization and statutes.
Complete the application
Once you have all of the above you must complete the contractor license application. This must be accompanied by the notarized affidavit. Include your experience and information from other licenses. Carefully check that you have answered all the questions in the document.
By having all of the above requirements you can submit the application to the Board for Contractor Licenses. It must be done before the 20th of each month because that day is when they meet to evaluate the applications. The process has a cost of $ 250.
The board will review the application and may call you for an interview. This process can last 3 weeks and the issue can last between 4 and 6 weeks.
Issue of license
If everything is in order, the board will approve the license and send you the certificate that includes the monetary limit. It is possible to request a review to make any changes.
If you have thought about working on construction projects, you must follow these steps to obtain a Tennessee contractor license. This is a good business idea, you will find more like these in our Hispanic Entrepreneurs digital magazine.