General contractor licence requirements
Checked 2026-09-04 · 8 min read
§ 1The five requirements
Strip away the state-specific paperwork and every board is asking the same five questions. The answers differ; the questions do not.
| Requirement | The question behind it | Proof it wants |
|---|---|---|
| Experience | Have you done this work? | Verified years at journeyman level or above, attested |
| Examination | Do you know the trade and the law? | A pass on both halves |
| Financial responsibility | Can you carry a job? | Working capital, net worth, or credit |
| Surety bond | Who pays if you do not? | A bond in the state's amount, on file |
| Insurance | Who pays if something is damaged? | General liability; workers' comp where you employ |
§ 2Financial responsibility
This is the requirement that surprises profitable contractors. It is a balance-sheet test, not an income test. North Carolina asks for current assets exceeding current liabilities by a tier figure:
| Tier | Project limit | Working capital | Bond instead |
|---|---|---|---|
| Limited | $750,000 | $17,000 | $175,000 |
| Intermediate | $1,500,000 | $75,000 | $500,000 |
| Unlimited | no restriction | $150,000 | $1,000,000 |
Receivables past ninety days are the usual killer.
A business turning a healthy profit can fail a working-capital test outright if the money is sitting in retention and slow invoices. Clean the ageing report before you file, not after the board sends the application back.
§ 3The bond
A licence bond is the board’s promise to the public that somebody will pay a valid claim against you. California sets it at $25,000; some states scale it to the licence tier, and North Carolina lets a bond stand in for the working-capital test entirely — $1,000,000 in place of $150,000 at the Unlimited tier.
You pay a premium, not the face amount. What you pay depends almost entirely on personal credit; our bond calculator shows how far that moves the number.
§ 4Insurance
General liability is what a general contractor and a homeowner both ask for, and in some structures the board asks too. California requires a licensed LLC to carry liability insurance with a cumulative limit of at least $1,000,000, rising by $100,000 per additional person of record up to $5,000,000 — a genuine statutory floor rather than a market norm.
Workers’ compensation follows employment: if you have employees, most states make it compulsory and make the board check. Where you are genuinely a one-person operation, an exemption filing is usually the mechanism — and it is a filing, not an absence.
Checked against
- NCLBGC — Classifications and Limitationsread 2026-09-04
- CSLB — Bond Requirements (SB 607, effective 2023-01-01)read 2026-09-04
- CSLB — Limited Liability Company (LLC) licencesread 2026-09-04
Not legal advice. Fees, bond amounts and deadlines are set by statute and change without notice — confirm with the board that issues your licence before you file.