Two different licenses
This trips up almost every new owner, so get it straight early: in most states there are two separate credentials, and you usually need both to run a business.
- A trade license (journeyman or master electrician, plumber, HVAC, etc.) certifies that you are qualified to do the work. You already earned this. The only thing to check: confirm it's registered in your name, not held under your former employer's company.
- A contractor license (or registration) certifies that your business can be hired, sell jobs, and pull permits under its own name. This often doesn't exist yet — you have to apply for it as the new business.
Doing licensed work and pulling permits under a business that isn't properly licensed is how owners end up with fines, failed inspections, and voided insurance. It's not worth it.
What the contractor license usually requires
Requirements vary by state and trade, but you'll commonly need:
- Proof of your trade license and a minimum number of years of experience
- A passing score on a business and law exam (and sometimes a trade exam)
- A surety bond — typically $5,000–$25,000 — which protects customers if you fail to complete or correct work
- Proof of general liability insurance (see the insurance guide)
- The state filing fee
Check reciprocity before you cross state lines
If you work near a state border, don't assume your license travels. Some states have reciprocity agreements that let you convert a license without re-testing; others make you start over. Check both states' licensing boards before you quote a job across the line — an unlicensed job in a neighboring state is an expensive lesson.
Keep it current
- Note your renewal date and any continuing-education (CEU) hours required — let a license lapse and you can be shut down mid-job.
- Keep digital copies of every license, bond, and COI in one folder so you can send proof the moment a customer or GC asks.
The whole point: when a homeowner or a GC asks "are you licensed and bonded?", you want the answer to be an instant, documented yes. That single word wins jobs your unlicensed competitors can't touch.