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Washington DC is constantly expanding. So, there are countless career opportunities for those with a valid Washington DC contractor’s license.
If you want to establish your own contracting business in the nation's capital but don't know how to start, you've come to the right place. Here, we discuss the steps involved in establishing your business and applying for the license. Read on for the full breakdown.
Obtaining a Contractor’s License in Washington DC
No doubt, starting a new business can be quite a thrill. However, it's easy to get overwhelmed and frustrated when trying to get the preliminary requirements out of the way.
Perhaps the first thing you'll need to do is obtain your contractor's license. For home improvement jobs, Washington DC requires a license for any projects over $300.
The legal and government obstacles can be tricky to overcome, but you can have your license in no time with the proper guidance and a little patience. At Contractor Training Center, we've helped numerous aspiring contractors obtain a Washington DC license—we'd love to help you next!
WHAT YOU CAN EXPECT FROM US
At Contractor Training Center, we go the extra mile to ensure our customers have access to the best resources possible. We have a team of industry leaders working as teachers to give our course-takers real insights into what it's like to work in the construction industry.
Once you are ready to apply for their contractor's license, we can provide assistance to make the application process smoother. With our help, you will avoid all the small mistakes people make when applying to be a licensed Washington DC contractor.Contact us
The Benefits of Having a Contractor's License in Washington DC
Washington DC has a booming economy with billions of dollars worth of construction contracts up for grabs. Wouldn't it be nice to get a piece of that action? Having a contractor's license in Washington DC allows you to take on bigger projects and create a sustainable business.
Whether you're looking to do commercial or residential renovation, plenty of contracts are available for licensed contractors. A license will give you far more credibility when approaching potential clients. What's more, obtaining your license allows you to obtain long-term contracts and charge higher rates.
Not only does having a license allow you to negotiate better rates and projects, but it essentially makes you your own boss. You have more authority to dictate how you and your team tackle tasks.
Getting a contractor’s license is vital to long-term success if you're considering entering the Washington DC construction industry—set yourself up to excel today by starting the process for obtaining your DC contractor’s license.
How to Get a Contractor's License in Washington DC
Now that you have a better understanding of why it's essential to get a Washington DC contractor's license, here's what you need to do to get one.
Step 1: Register Your Business Entity
The first step toward becoming a licensed contractor is registering your business entity or social security number with the D.C. Business Center. Depending on your business structure, you may also have to register with the Corporate Divisions and/or Department of Consumer and Regulatory Affairs. You might also need to obtain a Basic Business license.
Another important document you'll need to obtain is a Clean Hands Certificate. This document states that you don't owe any amount greater than $100 in taxes, penalties, or other fees.
Filing all your information with the government will legitimize your new contracting business. While dealing with all the documents can be tedious, it's a vital step towards becoming a licensed Washington DC contractor.
Step 2: Establish Your Trade Name
Every business or sole proprietor operates under a business trade name. Once you know which name you'll be using, you have to register the business DBA with the Corporate Divisions.
Make sure to take the time to think of which name you'll register, as it plays a significant role in your branding. People will need to remember your company whenever they need your services. Registering your trade name is often the first step to building a brand, but be aware that this won't give you complete legal protection.
Your trade name is simply a way for tax agencies to recognize your company. If you want to protect your business name legally, you'll also need to establish a trademark.
Step 3: Register with the Washington DC Office of Tax Revenue
Paying taxes is a crucial component for any company. Once you finish registering your business, register your company with the Washington DC Office of Tax Revenue. Fortunately, it is easy to register your business online.
After you register with the IRS, they will issue your company an EIN. An EIN is a 9-digit number the IRS uses to help track all your tax information.
Step 4: Obtain a Surety Bond
You'll need to obtain a surety bond of at least $5,000 for a two-year period. The bond protects your customer and your business if you fail to fulfill your part of the contract. You can get a surety bond from a licensed insurance provider.
Step 5: Purchase Property Damage and Public Liability Insurance
Property damage coverage will protect your business if you accidentally cause damage to one of your client's properties. Public liability insurance covers the cost of personal injuries. However, it only covers bodily injuries that happen on your business property. Any off-site accidents aren't part of the coverage agreement.
To be a fully licensed contractor, you'll need a certificate of at least $100,000 in public liability insurance coverage. For property damage, you need at least $50,000 in coverage over a two-year period.
Step 6: Decide What Type of License Your Business Needs
There's no one-size-fits-all contractor's license. The industry has a wide variety of contractors that all have specific skills and roles for a project.
Here's a breakdown of each type of license:
General Contractor's License
General contractors work in a wide variety of jobs on a construction site. With a general license, you are qualified to do or hire subcontractors for repair work, construction, electrical fitting, HVAC installation, and plumbing, just to name a few. eneral Contractor's License
General contractors are highly trained and typically equipped to manage large teams on a construction site. With your general contractor's license, you'll have the credibility to handle project budgets, employee schedules, payments, and various other responsibilities.
Specialty Contractor's License
For standard construction jobs, a general contractor will handle the main scope of the project. However, obtaining a specialty contractor's license is perfect if you want to manage the project yourself. Doing so will give you more leadership experience and also can reduce your contractor costs.
That said, you'll still need to hire sub-contractors to get the job done effectively. While you handle the project’s logistics, your sub-contractors will be hands-on and do most of the physical labor. Some examples of sub-contractors include electricians, plumbers, roofers, and carpenters.
If you plan on hiring subcontractors, always check to see that they have their own insurance coverage and favorable ratings from the Better Business Bureau for quality assurance.
Which Exam Should You Take?
To become a general contractor in Washington DC, you don’t need to acquire pre-licensing education or take an exam. Here’s a breakdown of the requirements for a general contractor’s license in the municipality:
Pay the $654 application fee
Obtain a certificate of liability insurance
Obtain a certificate of occupancy/home occupation permit
Corporate and tax registration
Pre-licensing education and an exam are requirements if you wish to become a specialty contractor. You’ll need to meet all the requirements under the Board of Industrial Trades, which has additional instructions for licensing in the specific fields.
For help preparing to pass your exam, check out our one-on-one executive tutoring programs.
Step 7: Submit a Home Improvement Sales Rep Delegation Letter and Contract Samples
Your company will have to submit the information of all your home improvement salespeople. Each business must have at least one home improvement salesperson delegated to their company registration.
For the contract samples, you'll need at least three examples. You can include them in your application envelope if you're applying by mail or upload the PDFs if applying online.
Step 8: Take Your Exam
The District of Columbia doesn’t require general contractors to pass an exam to obtain a license. However, subcontractors working in specialty trades (asbestos workers, plumbers, electricians, refrigeration and air conditioning mechanics, steam and operating engineers, and those in the elevator trades) need additional licenses as required by the District of Columbia Board of Industrial Trades.
Taking and passing your exam is one of the final steps to becoming a licensed contractor. You'll need to study hard and ensure that you're well-prepared for the test. See some of our tips below on how to prepare for your contractor license exam.
Exam Times and Date
There are a few times you can book your exam. To choose a time, you'll need to consult with your registered agent. They typically have a flexible timetable to find an appropriate time to come in and take your test.
Preparing for the Contractors Exam
No doubt, preparing for your exam can be nerve-wracking and may leave you feeling overwhelmed. However, it's essential to know that these feelings are entirely natural, considering getting your license is a big deal.
While Washington DC's exam will be different from other states, there are a few universal test-taking tips you can apply to increase your chances of passing.
On test day, make sure you eat a nutritious breakfast and arrive on time. If you don't pass your exam the first time around, try not to be discouraged. Several expert contractors didn't pass their first time, and you can always study more and retake the test.
FREQUENTLY ASKED QUESTIONS
If you have all your paperwork in order and pass your exam, the government will issue your license within 30 days. The duration depends on what kind of license you're applying for, the size of your company, and your registered agent.
Note that it's much faster to submit your application online or in-person than by mail.
The total fee for a general contractor's license is around $655. This cost includes the category license fee ($500), application fee ($70), endorsement fee ($25), and technology fee ($59.50).
You'll also need to pay for your home improvement salesperson license, which comes out at $154. Note that these are only the costs for applying and obtaining your license and don't include any preparation materials.
Being a contractor is an excellent career path if you're looking for steady work and job independence. While it's not an easy job by any means, it can be highly liberating and lucrative if done right. Once you learn the trade and how to conduct business, you can obtain large contracts that pay very well.