Demolition Contractor Company Licensing
Looking to start a demolition contractor company or expand your business into new states? Part of the process involves obtaining the required federal, state, or local licenses. Here’s what you need to know to start your own demolition business successfully.
Demolition Contractor Companies
If you are looking to start a demolition company, you first need to understand the different types of demolition. Which you choose will depend on factors like your interests, experience and expertise, and investment capital.
- Manual demolition involves the removal of concrete, wiring, plumbing, metal, wood, and other materials associated with residential and small commercial structures. Homes and small commercial buildings are often demolished manually.
- Mechanical demolition removes larger buildings and structures, requiring more equipment and labor. This is used for factories, large commercial spaces, and skyscrapers.
- Green demolition is a newer specialization considered more environmentally friendly, though it is a slower process. It recycles many of the original construction materials and limits the amount of debris and waste in landfills. Green demolition is more of a dismantling, as opposed to destruction.
Demolition contractor companies are hired for all kinds of buildings, including:
- House Demolition
- Barn Demolition
- Interior Demolition
- Mobile Home Removal
- Commercial Demolition
- Chimney Removal
- Pool Removal
- Concrete Removal
- Oil Tank Removal
- Deck and Fence Removal
- Demolition Debris Disposal
As with other types of construction companies, you will need to obtain a business license before accepting jobs. You may also need a general contractor's license, as well as a specialized demolition contractor license or permit.
Starting a Demolition Company
In order to launch a demolition company, you need the right help, equipment, and insurance. You also need to comply with applicable local, state, and federal regulations.
- Demolition Crew. While there are demolition companies that operate as a one-person crew, most jobs require hiring workers. In most instances, demolition company owners can hire construction laborers. Other jobs, like those involving asbestos removal or other hazardous material, may require special training.
- Demolition Equipment. Demolition equipment is often expensive to buy outright, which is why many companies just starting out choose to rent most or all of their equipment until they have the funds to make purchases. At a minimum, a demolition contractor needs a truck and basic tools. Other common equipment includes concrete pulverizers, hydraulic tools, and explosives.
- Insurance and EIN. If you plan to operate as a limited liability company (LLC), corporation, or another type of business entity, you will need to obtain an employer identification number (EIN). This allows you to hire permanent and temporary employees. Because of the nature of the demolition business, companies also need to obtain insurance to protect themselves against loss in the event of an accident.
- Licensing. Demolition contractor companies need to obtain the proper licenses in the states in which they operate. This process may be done through state or local authorities. You will also need to appoint a registered agent to receive notice of lawsuit and other legal or government notices.
You can consult with regulatory agencies to learn about the specific requirements in your area. You also have the option of outsourcing your licensing management to Harbor Compliance. Our business licensing specialists offer full-service support to guide you through every phase of the corporate lifecycle.
Obtaining Licensure as a Demolition Contractor Company
Contractors must have the proper local and state licensing to perform demolition work. Requirements vary from state to state. Some states leave licensing up to cities and counties, so it is important to understand your obligations as a demolition contractor company.
Depending on your location, state, county, or local municipality, you may need to obtain a demolition contractor license. For individual jobs, you will likely need to obtain additional permits individually on behalf of your clients. In the event your company handles demolition sites that contain hazardous materials, there are often specific certifications you need to obtain for the type of work you will conduct, as well as for your equipment, staff, and self.
In most states, a demolition license or permit is required when:
- A primary structure will be removed from a lot
- An accessory structure with utility systems, mechanical systems, or hazardous materials will be raised or removed
- A building undergoing renovations requires a substantial amount of demolition
Along with the license application, you may need to submit a grading plan, inspected plumbing permit, or cash demolition escrow bond to ensure the work is completed safely and sanitarily.
Depending on the size of the job, you may need to obtain a performance bond or a letter of credit. A performance bond is a type of surety bond issued by an insurance company or bank. It guarantees satisfactory completion of a demolition project. A letter of credit is a type of financial contract between the demolition company, their client, and a bank. It ensures that the demolition contractor will be paid once the conditions of the letter of credit have been met.
If you are uncertain about the licensing requirements you need to follow for your demolition contractor company, Harbor Compliance can help. Our business licensing experts can examine the status of your company’s license and ensure your business is in compliance with local and state regulations. We can also assure you remain current with those requirements with our software that ties directly to states’ secretary of state’s databases.
Explore Licensing by State
Click on a link below to view licensing information in your state.
Meeting the demolition contractor company license requirements is not always an easy process. Fortunately, Harbor Compliance License Manager helps construction professionals maintain their licenses by automating repetitive tasks like tracking renewals. Through License Manager, you can also access reference data for the states in which you work, reducing the time spent researching state requirements. Contact our licensing experts today to learn more.
Associated General Contractors of America
Professional association providing advocacy and organization for construction firms and workers.
National Association of Home Builders
National association for the promotion of the housing industry.
National Association of State Contractors Licensing Agencies
National organization that represents and promotes the interests of state level contractor licensing agencies.