In order for contractors to fulfill licensing requirements for work in Tennessee, they must be approved by the Tennessee Department of Commerce and Insurance Board for Licensing Contractors. Licensing is mandatory for contractors working on projects that exceed $25,000 in the Volunteer State. Tennessee contractors applying for a license need to be mindful of a variety of things when they work on projects, including the budget of the project, the scope of work, and how the work they perform is classified by the Tennessee Department of Commerce and Insurance Board for Licensing Contractors.
In this brief article, the construction attorneys at Cotney Construction Law will discuss the steps every contractor in Tennessee must take to ensure they are properly covered to work on projects in the Volunteer State. Remember, working on projects without a license can result in significant fines that can cripple your construction business. To ensure you are following the licensing requirements in Tennessee, consult a Nashville license defense attorney before commencing work on all projects.
Steps to Becoming a Licensed Contractor
As we discussed above, contractors cannot perform work on the majority of projects in Tennessee without a license. Here are some of the necessary steps for a contractor to take to successfully obtain a contractor’s license:
1) Establishing a Business Entity: For starters, any contractors operating as a corporation will need to establish their business by registering their LLC with the Tennessee Secretary of State. All contractors seeking a license are required to classify their business status (Sole Proprietor, Corporation, Partnership, or LLC) with the Tennessee Department of Commerce and Insurance Board for Licensing Contractors. Contractors will need to provide the exact name listed on any of their financial statements when they register their business.
2) Becoming Certified: Along with establishing their business status, a contractor or “qualifying agent” (can be the owner or an employee) will need to pass a trade exam in the area they want to be classified in. All licenses are classified in one of the following areas:
- Building Construction
- Heavy Construction
- High, Railroad and Airport Construction
- Municipal and Utility Construction
- Mechanical Contracting
- Electrical Contracting
- Specialty/Medical Gas Piping
3) Understanding Financial and Insurance Obligations: All classifications are issued with a specific monetary limit. A CPA must provide a financial statement, which is audited by the agency before a contractor receives proper licensing. Further, construction employers need to have general liability and workers’ compensation insurance coverage that covers both themselves and their workforce to qualify for licensure. To learn more about the requirements, consult a Nashville license defense lawyer.
Obtaining a License is Only the First Step
License review and approval is conducted on a monthly basis by the Tennessee Department of Commerce and Insurance Board for Licensing Contractors. Although obtaining a license is a proud achievement and a necessary step to work on lucrative construction projects in Tennessee, it’s only the tip of the iceberg for contractors that intend on retaining their license. It’s critical that all licensed contractors understand the rules and restrictions related to their licensing classification along with their requirements on construction projects. To ensure your best interests are protected, consult a Nashville license defense attorney at Cotney Construction Law for all of your construction legal needs.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.