Difference between a handyman and a contractor in business licencing requirements

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It’s critical to know which licensing rules apply in your city and state if you want to become a professional contractor or handyman and subsequently establish a business. Your firm could be punished or shut down if you commit a single offense.

The problem is that rules regarding handyman and contractor license requirements are not always clear, and they might differ greatly from state to state.

Before you start your business, here are some things you should know about obtaining the proper licenses and permits.

What’s the difference between a contractor and a handyman?

Before you start looking for the licenses and permits, you’ll need, you’ll need to figure out whether you’re a handyman or a contractor under the law.

For someone with a variety of trade talents, starting a handyman business is an enticing possibility. But what exactly qualifies someone as a handyman? Handyman work often consists of little jobs, fast repairs, or work valued under a specified financial amount, but state rules differ.

Contractors are different from handymen in that they work on major projects like commercial or residential contracting, which normally entails a bidding process. (A state may require a contractor to obtain the appropriate licenses before making a bid in various situations.) Plumbing, electrical, HVAC, gas, and asbestos/hazardous waste remediation are all areas where contractors work. Contractors may work as subcontractors for other companies but must show that they can manage a project on their own.

What are the criteria for handyman work in terms of licensing?

As a general rule, most states have a “Minor work exemption” or “Handyman exemption.” The maximum dollar amount a handyman can charge for a job before needing a license is defined by this exemption. It may also state what kind of employment you are allowed to undertake without a license.

It’s crucial to remember that each state has its own set of licensing regulations and requirements. A handyman in California, for example, is required to hold a license for any job worth more than $500, whereas in Arizona, the fee is $750. In some areas, such as Texas, a handyman license is required regardless of the type of work performed.

Other factors to consider are as follows:

  • Maximum dollar amount for labor and materials – A license may be necessary if you’re working on a job that costs more than a specific amount, including labor and supplies. The maximum in Arizona, for example, is $1,000.
  • Liability coverage- Liability insurance is required in some areas to safeguard your business from lawsuits or other financial consequences resulting from accidents or damage to a customer’s property.
  • Limitations on the kind of jobs you can do- Aside from monetary restrictions, your state may enable you to work as a Handyman Painting Woodlyn Hills without a license provided the activity fits certain conditions.

Start by visiting the website of your state’s contractor’s board to learn more about the state’s licensing requirements. Once you’ve figured out what you’ll need, take attention to any rules that govern how you promote your company. Some states require you to disclose that you are unlicensed in your marketing or prevent you from promoting at all if you are unlicensed. Furthermore, if a client wants you to do something that is outside of your state’s handyman scope (often specialist work like plumbing, electrical, or HVAC), you must decline.

What does it take to get a contractor’s license?

If your state’s contractors board and licensing criteria classify you as a contractor, you’ll need to demonstrate your competence in your trade and pass a general contractor exam (usually on business law and your trade). Your state’s licensing board will also inquire about your years of experience, your ability to manage the day-to-day operations of a construction or skilled trade company, whether you have a criminal record, and your financial situation.

Additionally, be prepared to present documentation demonstrating your legal existence and registered business name (LLC, corporation, etc.).

If you’re looking for a license in a skilled profession, such as electrical, plumbing, or mechanical engineering, learn about your state’s specific licensing and examination criteria, as they may differ from those of a general contractor.

It’s time to get worker’s compensation insurance, liability insurance, and a contractor’s license bond once your license has been granted.

Don’t forget to look into local regulations; county and city licensing requirements should also be considered.

Will you form a corporation or a limited liability company (LLC)?

Also, if you intend to register a corporation or limited liability company for your firm, make sure that your corporation or LLC has all of the state licensing boards’ required permits. If you’re not forming a distinct corporation but intend to use a DBA assumed name, make sure you register it if state law requires it.

Will you form a corporation or a limited liability company (LLC)?

Also, if you intend to register a corporation or limited liability company for your firm, make sure that your corporation or LLC has all of the state licensing boards’ required permits. If you’re not forming a distinct corporation but intend to use a DBA assumed name, make sure you register it if state law requires it.

The dangers of breaking state licencing laws

Don’t overlook this crucial part of founding and running a handyman or contracting company. State enforcement officers take violations very seriously, and they perform routine sweeps or stings of hundreds of construction sites to search for them. They’ve also been known to scan Craigslist for unlicensed contractors who are advertising illegally. You could be held personally accountable for damages resulting from a contracting job if your firm or LLC does not have a license.

Reach out to other handymen, consult an attorney, and use the BizFilings Contractor Business License Wizard to identify the specific licenses or permits you’ll need, as well as direct links to the application procedure, to ensure you understand the licensing requirements in your state, county, and town.

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By Daniel Lincoln

Daniel Lincoln is the founding member and Manager of Multiple Websites for First SEO Paper, also the owner of high-level quality sites focusing on General Categories only.

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