How to Start a Construction Business in Virginia
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In Virginia, any person who engages in the business of constructing or improving structures on property that they do not own must obtain a contractor license from the Virginia Department of Professional and Occupational Regulation, Board for Contractors. Contractor licenses are categorized according to class and specialty. A license class designates the monetary size of the projects your business can take on. A license specialty designates the particular type of work your business can carry out. To operate a general construction business, you will require a “building” specialty. To obtain a contractor license, first acquire on-the-job experience under a contractor with a “building” specialty.
Download a contractor license application and a contractor licensing information sheet from the Board of Contractors web site. Read through these documents to familiarize yourself with the licensing requirements and procedures.
Choose the class of license for which you will apply. Class C contractors are authorized to take on single construction projects with a value up to $10,000, so long as total project revenues in any 12-month period are no greater than $150,000. Class B contractors are authorized to take on single construction projects with a value up to $120,000, while total project revenues in any 12-month period may not exceed $750,000. Class A contractors are authorized to take on single construction projects of any value and have no 12-month revenue limits.
Obtain work in the construction industry under a licensed contractor with a “building” specialty. Licensure requires verifiable on-the-job experience in your chosen specialty. The length of experience required depends on the class of license you seek. A Class A license requires five years of verifiable experience, while a Class B requires three years and a Class C requires two years.
Schedule a contractor licensing exam with PSI Exams if you are going to apply for a Class A or Class B license. Download a Candidate Information Bulletin from the PSI Exams web site, psiexams.com. The Bulletin includes an exam application. Complete the application and submit it, along with fees, to the indicated address. After processing, you will be notified of your exam date and location. PSI will notify the Board of Contractors when you pass the exam.
Enroll in and complete an approved business training course. A list of approved courses is available on the Board of Contractors website (see Resources). Upon completion of the course, your provider will notify the Board.
Complete a financial statement form if you are applying for a Class A or Class B license. Download the form from the Board of Contractors website. For a Class A license, you must have a net worth of at least $45,000. For a Class B license, you must have a net worth of at least $15,000. Have the form Notarized and submit it with your application.
Register your business name. You can do this online through the Commonwealth of Virginia’s BusinessOneStop website.
Register your business with federal and state tax authorities. Visit the IRS website to obtain a Federal Employer Identification Number (EIN). Visit the Virginia Department of Taxation website to obtain a state tax identification number.
Complete your application and submit it, along with associated documentation and fees, to the indicated address. Upon approval, you will be issued a contractor license.
Contact your local Commissioner of the Revenue and visit your local Building Department to determine whether you must meet any additional local licensing requirements before beginning business operations. Local licensing requirements may vary widely from city to city. Until you meet local standards, you may not lawfully operate under a contractor license.
If you plan to operate your business as a partnership, corporation or limited liability company, you must register with the Virginia State Corporation Commission. A sole proprietorship need not register.
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- Virginia Department of Professional and Occupational Regulation: Board for Contractors
- PSI Exams Online: VA Contractor -- Class A or Class B
- Virginia BusinessOneStop: Steps to Launching a Business
- IRS.gov: Employer ID Numbers (EINs)
- Commonwealth of Virginia State Corporation Commission: Forms and Fees
- Virginia Department of Professional and Occupational Regulation: Contractor Licensing Information
- Virginia Department of Professional and Occupational Regulation: Contractor License Application
- PSI Exams: Contractor Examination Candidate Information Bulletin
- Virginia Department of Professional and Occupational Regulation: Pre-License Education Providers
- Virginia Department of Taxation: Register A Business Online
- Virginia BusinessOneStop: New User Registration
William Carpenter began writing professionally in 2004, working with nongovernmental organizations and business clients while living in China. He maintains clients in China while writing for a variety of U.S. publications. Carpenter holds a Bachelor of Science in economics from Portland State University.