If the prospect of setting up your contractor business is exciting but a little overwhelming, this is the post for you.
Whether you’ve always wanted to start a contracting business or you’re transitioning to a new career, getting a Minnesota contractor license opens doors. The only problem is that the requirements and process can get a bit confusing. Trust me, I opened so many tabs on my computer trying to learn everything that my laptop sounded like it was ready for takeoff.
Now, the tabs are closed, and the dust has settled. What’s left is a much simpler how-to guide for getting your license and starting your business.
Why Do I Need a Minnesota Contractor License?
When you’re eager to start your contracting business, every additional form or requirement can feel like a headache. However, all of the most important steps have a reason. In the case of Minnesota contractor licenses, the process protects everyone involved in a contracting project. How you ask?
- Homeowners and customers feel more confident in their contractors knowing they’ve met specific requirements and standards
- Contractors gain legal right such as lien rights for unpaid work when they play by the state’s rules and get a license
If you need something a little stronger to compel you, realize that contracting without a license is a misdemeanor that opens you up to potential administrative and civil penalties.
Licensing isn’t the only term you need to be familiar with, though. Here’s a quick vocab lesson.
- Licensure laws are in place to make sure that contractors have the knowledge and skills to complete jobs successfully. To get a Minnesota contractor license, you’ll need to take an exam. It’s fairly common for states to have different licensing requirements for different skills and specialties.
- Registration laws give both contractors and customers legal protection. By registering with the state, you’re letting the government know that you’re doing business and have proper insurance in place.
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Does every contractor in Minnesota need to be licensed? Not exactly everyone, but pretty close to it. Let’s run through a few scenarios.
- If you only work on one specialty, like masonry projects, and have no plans to help homeowners with other skills, you don’t have to be licensed.
- If you want to work on a few projects, such as interior painting and exterior painting, you do need a license.
- If you only have one skill, but that specialty is roofing, you need a license.
- If you plan on being a subcontractor, you don’t need a license. You do have to register, though.
If you have any doubts about where your skills and business will fall on this spectrum, contact the Minnesota Department of Labor and Industry at 651-284-5034 or [email protected]
Minnesota Contractor License Requirements: What You Need to Do
Now that you’ve been briefed on your state’s rules around contractor licensing, let’s get the process started, shall we? Here are the Minnesota contractor license requirements and steps you should be aware of.
Steps for specialty contractor licenses
Since license exams are meant to test someone on the specialties they wish to work in, there are different exams for unique skills. The exam and application process is similar for all specialties. Still, you will need to take the correct exam for your specialty.
Here’s who will need to take a different exam than other general contractors:
- Elevator contractors
- High-pressure piping contractors
- Manufactured housing construction contractors
If you fall into these categories, be sure to check out your exam info here .
Take the license exam
While some states have experience requirements before you can take the exam, Minnesota does not. You can apply to take the exam online or by submitting an application via mail. If you’re a sole proprietor, you have to be the one to take an exam. However, companies with two or more employees or partners can choose a qualifying to take the test on the company’s behalf.
What should you expect in the exam? Lucky for you, Minnesota has an exam guide that even includes sample questions. The test is 110 questions, and you’ll have four hours to take the exam and earn at least 70%.
What you need before applying
Taking and passing your Minnesota contractor license exam is a core part of setting up your contracting business the right way. However, there are still some loose ends to tie up before submitting your final application.
Registered business entity. Even if you are working solo, you’ll need to set up a business entity with the state. This includes choosing a business structure, such as a sole proprietorship or C-corp, and registering your name. Learn about starting or registering a new Minnesota business here.
SSN or FEIN. If your business is set up as a sole proprietorship or one-member LLC, you can use your social security number for identification. Companies, on the other hand, will have to include their Federal Employer Identification Number on their application.
A physical and mailing address. Your business has to have an address for licensure. Unfortunately, you can’t use a P.O. Box for your physical address, so you’ll use your home address if you don’t have an office. Luckily, you don’t have to reveal that address to the public on your license. Instead, you can use your mailing address, which can be a P.O. Box.
Statement of business owners and partners. Anyone that owns at least a 10% share of your business has to be disclosed.
A qualifying person. Remember how you or a qualifying person within your business needs to take the exam? There’s also a form to officially designate that person.
A background disclosure. The state wants to know about who they’re granting licenses to, so all owners and shareholders has to fill out a form with past employment and criminal history information.
Liability insurance. Skilled contractors like you take precautions to keep everyone on a job site safe, but sometimes accident strikes. Minnesota requires you to have general liability insurance to cover property damage and bodily injury. The required amounts are listed here.
Worker’s compensation compliance and insurance. If you have employees, you need to have worker’s comp insurance. Everyone, including those without employees, has to fill out a compliance form.
Submit your application and fee
If your head is spinning from that long list of application requirements, take a deep breath. Minnesota has the application form, along with all additional required forms, in a single document. That way, you can fill out all the necessary information and check requirements in one place.
You also have options on how you want to submit your application. Either upload your application here and pay your fee online or mail your printed app and a check or money order to:
Department of Labor and Industry
PO Box 64217
St. Paul, MN 55164-0217
How much will the fee to get your Minnesota contractor license be? It depends on your revenue. If your gross annual receipts are under a million dollars, the new license fee is $440. That rate can go up to $640 for businesses that make more than $5 million a year, though. A breakdown of fees is listed on the application document.
Renew your license every two years
Congrats! After you’ve passed your exam and received your license, you’re ready to start your handyman business. The licensing process is just the beginning, though. In addition to displaying your license number on contracts and ads, you’ll need to complete 14 hours of continued education to renew your license every two years.
If you still have some Minnesota contractor license questions unanswered, check out the state’s FAQ or visit the Minnesota Department of Labor and Industry’s website.
If you still need to get general liability and worker’s comp insurance before you can apply, get a contractor’s insurance quote to ensure you’re covered.
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