Learn how to obtain and maintain a subcontractor company license in all 50 states.

What Is Subcontracting?

A subcontractor is a person or business that undertakes work for another company as part of a larger project. Subcontractors perform work for contractors under a contract for service that legally binds them to the agreed work.

Subcontractors are not supervised. Rather, they are given instructions on how to perform their work and they deliver services to the contractor as if they were the final client. Workload varies, as some are engaged in fixed contract assignments, while others take on task-based contracts.

How to Start a Subcontractor Company

If you are looking to start or expand a subcontractor company, you need to understand the ins and outs of registration, licensing, and maintenance. It is imperative to comply with state and local laws to ensure your business can operate without interruption, and you can provide clients with the best services possible. Establishing or expanding a subcontractor company starts with ensuring you have the necessary skills.

Gain Skills in Construction

Whether you are new to the construction industry or you’ve worked on job sites for years, it is essential to have the right experience if you are looking to start a subcontractor company. Contractors and subcontractors alike must have the proper skill set to obtain contracts and complete jobs. Depending on your area of expertise, you could specialize in areas such as the following:

• Cabinet making
• Carpentry
• Hazardous waste removal
• Plumbing
• Roofing
• Tile installation

Register Your Business

In order to start any type of business, you will need to register it with the state. This involves choosing a name and entity structure, submitting an application with your Secretary of State and paying any applicable fees, registering with the IRS to obtain a tax identification number, and opening a business bank account.

If you are concerned about managing the business registration process on your own, you can seek guidance from the business licensing experts at Harbor Compliance. With our professional licensing services, we offer full support through all of the stages of the corporate life cycle and can provide access to expert software insights. We make preparing and filing applications easy and handle communication with government agencies on your behalf. With our software, you can track your registration status, license numbers, filing history, fees, and renewals 24/7.

Obtain Necessary Licenses and Insurance

Many states require a license for working in the construction industry. Some states require a general contractor license for all types of construction, while others require work-specific licenses.

In terms of insurance, subcontractor companies will want to obtain, at a minimum, general liability insurance, and commercial auto insurance. In the event of an accident, your insurance policy will likely cover any related losses. If you plan to hire employees, you will also want to obtain workers’ compensation insurance.

Create a Contract Agreement

Once you are fully qualified to run your subcontractor company, you need a way to contract your services to a general contractor. A contract agreement should include the scope of work, payment amount, scheduling, and the expected time frame for delivery for both parties. You may want to consider hiring a lawyer to draft a service agreement for you that you can fill in with information like payment requirements and the scope of work on a per-project basis.

It is essential to be aware of state requirements regarding business registration and licensing when establishing and expanding your business. If you are concerned about managing the business registration process on your own, you can seek guidance from the business licensing experts at Harbor Compliance. With our professional licensing services, we explain all of the stages of corporate compliance and provide full-service support and expert software insights.

We make preparing and filing applications easy and handle communication with government agencies on your behalf. With our software, you can track your registration status, license numbers, filing history, fees, and renewals 24/7.

Applying for a Subcontractor Company License

Licensing requirements for subcontractor companies vary by state. It is essential to verify the process in your state to ensure you are prepared every step of the way. You will likely need to gather all relevant documentation, including financial statements, proof of a commercial activity license, a business plan, and more. You will also need to appoint a registered agent to receive notices of lawsuits and other legal or government notices. To manage those tasks more efficiently, Harbor Compliance offers licensing management software and managed services to help simplify the application process, allowing you to focus on other aspects of running your business.

In addition to licensure, you also have the option of pursuing certifications. While these may cost money and time, they can validate your business and reassure clients that you are qualified to do their job. Note that certification may be required for certain jobs that have environmental, health, or safety impacts.

Maintenance and Renewal

Most states and cities require licenses to be renewed on an annual or biennial basis. Renewal ensures your business complies with all state and local regulations. Renewal fees vary, so it is a good idea to be aware of what you may owe to keep your business in good standing.

If you are currently operating a subcontractor company and are looking to outsource your maintenance and renewal duties, Harbor Compliance can help. We are available to review your business status, ensure you can operate uninterrupted, and explain what steps you need to take in order to ensure you remain compliant with state and federal regulations.

Explore Licensing by State

Click on a link below to view licensing information in your state.

Meeting the home improvement 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 such as tracking renewals. Through License Manager, you can also access LicenseIQ™ - our extensive, proprietary database of nationwide licensing information - to research the requirements for the states in which you work. These tools reduce the time you spend researching state requirements and prepare your organization for success. Contact out licensing experts today to learn more.