April 14, 2021
If you offer or are planning to offer services related to construction in Virginia, you need a general contractor license to operate legally. But the specific license you will need must be based on the types and scope of projects you want to perform.
In Virginia, the term contractor means any individual that can bid or accept contracts or orders for managing, performing, or supervising in part or whole, the construction, repair, or removal of any structure or building in exchange for a commission, fixed price, percentage, or fee. This means that practically anyone in the construction trade, including flooring installers, tile setters, and painters, among others, will need a general contractor license to operate.
In addition, no person can engage in or offer contracting work without the proper license. This means that no one can even offer or advertise their construction services without a contractor license.
In Virginia, a general contractor license can only be given to businesses. This means that anyone who wants to get licensed needs to have a general contracting business. When starting your business, you can select from several options, with the most common business structures being limited liability companies (LLC), sole proprietorships, partnerships, and corporations.
Once you have registered your business, you can start the process of getting a general contractor license. Once you obtain your license, individuals directly employed by your company won’t need to obtain individual licenses because they’ll be able to work under your business’s general contractor license.
Licenses in Virginia include two parts, which are specialty and class. The class will be based on the size and dollar amount of the projects you want to work on:
The specialty part of the license is assigned by letter codes and is based on the specific contractor work you want to do. The specialties come in various types, with the most common being:
To secure a specialty on a general contractor license, the individual who’s the designated Qualified Individual (QI) should satisfy all the eligibility requirements for the particular specialization area they’re after. Also, take note that professions including HVAC, plumbing, and electrical are categorized as specialized trades, which means that you should have a tradesman license if you want to work in these specialized areas.
To get a general license contractor, you should follow these steps:
o $385 for a Class A license
o $370 for a Class B license
o $235 for a Class C license
An extra $50 for the yearly business registration fee is required for all license classes. If you’ve followed all the instructions and submitted all the necessary requirements, you can expect a decision within 30 days of your application. Once approved, you’ll receive your license in the mail.
Aside from securing the proper licenses for your general contracting business, you’ll need to have insurance coverage to safeguard you and your business. These insurance policies can include:
Performing work without a general contractor license or proper license class is illegal and is categorized as a Class 1 misdemeanor in Virginia. You will also have to pay a fine of up to $500 for each day you worked without a valid license. You also may not be able to collect payments if you don’t have a license. Finally, if you engage in a consumer transaction (e.g., work on a residential home) without a license, you could be in violation of the Virginia Consumer Protection Act (VCPA).
If you have any questions about obtaining a general contractor license or if you just need sound business advice, reach out to us here at McClanahan Powers, PLLC by filling out our online form or calling us at 703-520-1326 to schedule an appointment with an experienced business lawyer in Virginia Today.