According to the US Census, the owner-occupied housing rate is 67.1%. With this many homeowners comes the need for general contractors to tackle a variety of remodeling projects and repairs. If you're a contractor looking to obtain your contractor license in Missouri, there's no time like the present.
A contractor license helps you gain access to clients as you bolster your spot in the industry. It also helps you bid on larger jobs, as you can hire subcontractors.
But how do you get a Missouri Contractor License? What's required, and what does a contractor license cost?
This helpful guide walks you through the ins and outs of Missouri Contractor License requirements, so be sure to keep reading for information every contractor needs to know.
Is a Missouri Contractor License Required?
In short, no; Missouri contractor licensing isn't required at the state level. However, businesses do have to register with the Secretary of State, and additional local requirements apply. This means in some cities and counties, a local contractor's license or registration is required to perform construction legally.
Luckily, the registration process is simple. All you have to do is visit the Secretary of State's website where everything for your registration is under the Business section of their portal.
Once you create a login, you'll find a step-by-step guide walking you through the whole process. Your business structure and how many registering partners you have will dictate the registration fees, but you can expect to pay anywhere from $30 to $200.
Should Handymen Get Licensed?
Since there's no state-wide license requirement, handymen aren't required to get licensed. However, they do have to adhere to local registration requirements.
These requirements might be at the city or country level, so ask each agency before signing up for any work. It's important to note that handyman work has its limitations in Missouri. You're allowed to legally perform minor maintenance jobs such as trim installation, deck staining, pressure washing, painting, and cabinet and furniture assembly.
Do You Need Business Insurance?
After you secure your contractor license, you'll want to invest in business insurance to protect you, your workers, and your assets. Here are the different types of insurance you may need.
General liability insurance is the best insurance a general contractor can carry. It covers everything from property damage to third-party accidents and bodily injury. It also includes advertising and personal injury, medical expenses, and product defect claims, to name a few.
Between 2016 and 2020, the average property damage claim was $13,962. Business insurance works to prevent you from paying this- or more- out of pocket, should you find yourself involved with a property damage claim.
Workers' Compensation Insurance
If you have five or more employees, then the state of Missouri mandates businesses carry workers' compensation insurance. The construction sector requires even stricter guidelines, with workers' compensation insurance being mandated for one or more employees.
Workers' compensation insurance protects sick or injured employees up to your policy's limits, so it's essential insurance for business owners to carry.
Inland Marine Insurance
Inland marine insurance helps protect your equipment and tools either on the job or in transit. It can protect your business financially should any of the following occur:
- Property damage to your business
- Business property loss
- Business property theft
When working as a contractor, the right tools are the determining factor of whether or not a job will go efficiently and smoothly. Ineffective tools might mean you go past your projected completion date, costing you time and money, especially if they break often or aren't equipt for the scope of work.
But contractors run the risk of losing their tools or having them stolen, and may have to pay a substantial amount of money to replace them. And without the proper tools, you can't bid on new jobs.
This is where inland marine insurance comes into play. It covers replacements and repairs, up to your policy's limit. It also covers someone else's tools, should they get lost or stolen, so it's worth it to invest in this insurance for you and your employees.
Get Your Contractor's License in Missouri
In the state of Missouri, licensing varies from city to city, since there isn't a statewide license you can apply for. The licensing process is done at the local level, so it's not a one size fits all.
However, this guide breaks down the licensing process in two major cities, so you can see what each set of requirements entails.
Kansas City Contractor License
If you're in Kansas City, you need to apply for your license at the City Planning & Development office. There are different license categories for you to familiarize yourself with before applying, such as the following:
- Demolition contractor class I
- Demolition contractor class II
- Electrical contractor class I
- Electrical contractor class II
- Electrical contractor class III
- Elevator contractor class I
- Elevator contractor class II
- Fire protection contractor class I
- Fire protection contractor class II
- Fire protection contractor class III
- Gas-fired appliance contractor
- Heating and ventilating contractor
- Pipe fitting contractor
- Plumbing contractor
- Refrigeration contractor
- Residential building contractor
- Sign contractor
Now that you know the different categories, there are steps to take before qualifying for your contractor license.
First, you need to complete and have notarized the application form. Next, you need proof you're at least 21 years old and graduated high school or have a GED.
You'll need to provide proof of your skillset and experience, along with the results of any exams you've taken from recognized exam agencies. You also need a certificate as proof of general liability insurance, with a minimum coverage of $1,000,000 per occurrence, a cash deposit, and $55 for your application fee (non-refundable).
Once you obtain your license, you need to pay $167 every four years in order to renew it.
St. Louis Contractor License
If you're in St. Louis and interested in obtaining your Missouri Contractor License, you need what's called a Graduated Business License.
The first step is getting a state sales tax identification number. You'll get this from the Missouri Department of Revenue. Next, you'll need to complete your license application and provide proof that you have workers' compensation insurance.
Afterward, you need to get clearance from the Collector of Revenues Office, obtain your Occupancy Permit (from the Building Division), and pay your application fee. This ranges from $100 to $200, depending on when you apply in the year, as it tends to vary.
Apply for Your Tax Identification Number
Contractors in Missouri have numerous taxes to collect and pay, and because of this, you need a specific tax identification number. You might have to withhold tax, or apply sales or use tax for a seller's permit. You may also have to pay unemployment insurance if you have employees.
If you need more assistance, you can contact the Missouri Department of Revenue.
Filing a Mechanics Lien
You may wonder if you can file a mechanics lien if a client refuses to pay you for your services, and what the requirements are. Do you need to be a licensed contractor to file?
You may also wonder what a mechanics lien is and when it applies. Let's take a look.
What Is a Mechanics Lien?
A mechanics lien has nothing to do with mechanics. They're legal documents to allow someone to seek compensation if they've experienced nonpayment by the client who hired them to complete a job.
Usually, contractors file mechanics liens. It's also common for subcontractors and suppliers to file these liens if they haven't received payment for their goods or services for a private residence, land, or another type of dwelling.
Mechanics liens are visible in public records, so if someone buys a house with a mechanics lien it means they either have to pay the lien themselves or demand the seller handle it. It's typically the latter, so homes with mechanics liens are difficult to sell until the liens are taken care of.
Lenders and banks typically are unwilling to refinance any property or home with a lien against it. If a homeowner has a mechanics lien against them, paying the money they owe is virtually unavoidable, especially if they plan to move and don't want to risk their home going into foreclosure.
It's not uncommon for homeowners to try and strike a deal with contractors, so be prepared if you ever encounter this situation.
Can You File a Mechanics Lien in Missouri?
Mechanics lien rights extend to all of the following professionals in the construction industry:
- General contractors
- Material suppliers
- Registered architects
- Equipment lessors
It's important to note that lien rights for equipment lessors only apply to commercial projects, and the claim must be at least $5,000.
If the claim is for a residential project that's owner-occupied and has no more than 4 units, only the person working directly with the owner-occupier can assert this type of lien.
Can Unlicensed Contractor File a Mechanics Lien?
Anyone contractor can file a mechanics lien. Missouri doesn't enforce licensing rules, so licensed and unlicensed contractors alike can file these claims.
Keep in mind that if you file a mechanics lien for a claim that requires a licensed contractor to complete the work, you run the risk of facing penalties. It's best to err on the side of caution and get your contractor license in Missouri.
Do Mechanics Liens Require a Written Contract?
You may be wondering if you can file a mechanics lien without a contract. In short, no. But you should make it a habit of getting all construction agreements in writing.
Written contracts help lend credibility if your claim goes before a judge, as does having a Missouri contractor license.
Deadline to file a Mechanics Lien in Missouri
The rule of thumb is that a mechanics lien in Missouri needs to be filed 6 months after the last date labor was performed or materials were provided for a project.
There is an exception to the rule, however. If the lien is asserted from equipment lessors, it has to be filed 60 days from when the lessor removed the very last piece of their equipment from the project site.
It's important to remember that any claimants other than direct contractors are required to provide a Notice of Intent at least 10 days before filing their claim.
Get A Contractor License in Missouri
Now that you know how to get your contractor license in Missouri, you can start applying.
Contractor Training Center can help you with all your licensing needs, including our application assistance services. We offer everything from professional tutoring to license application reviews, helping you obtain your contractor license as quickly and smoothly as possible.