When getting your general contractors license in Alabama, you will go through many of the same steps as you would in other states. However, no state is identical when getting your general contractors license, and the Alabama Licensing Board for General Contractors has some distinct requirements that you’ll need to meet.
The Alabama State Licensing Board for General Contractors requires that you register your business and have a license through the Secretary of State if performing any contracting work as a business entity — along with tax and workers’ compensation documentation. Additionally, education requirements and exams will have to be taken before obtaining your license. You must also complete a financial statement, equipment questionnaire, and experience statement booklet as part of the application process. As always, fees will be associated with many components of your Alabama general contractors licensing process. Depending on when you start your application process, it may be time-sensitive. So, you’ll want to make the process go as smoothly as possible.
Alabama General Contractor License Requirements
The Alabama State Licensing Board for General Contractors defines a general contractor as:
“One who undertakes to construct or superintend the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving or project or any improvement in the State of Alabama where the cost of the undertaking including labor and materials is $50,000 or more.”
Your “general contractor” license will be called a “prime contractor” license. The state of Alabama issues two licenses for general contracting work:
Prime Contractor – Any prime contractors trying to do commercial or industrial projects worth more than $50,000 or any prime contractors seeking to do residential projects more than $10,000, are required to have a license.
Subcontractor – Any subcontractor performing work for a licensed general contractor, if the work is more than $50,000, is legally required to have a subcontractors license as well.
Who Needs a Contractors License?
Anyone who plans on the contracting work above must apply for the appropriate licensing. Alabama also requires a different licensing process through their respective board for specialty trades, such as plumbers, electricians, and HVAC work.
What Do You Need To Become a General Contractor in Alabama?
An outline of your general contractors licensing process can help you determine if you are ready to start your application process:
- Applicants (or their business) must have a net worth or minimum working capital of $10,000 or more.
- Prime Contractor Applicants must have a Certified Public Accountant, or board-approved public accountant, fill out a statement booklet. Subcontractors can do this part on their own. Complete the Confidential Financial Statement, Equipment Questionnaire and Experience Statement.” You can download it right here from the board’s official website. This will need to be submitted at the same time as the application but is not included in the application packet.
- You must have general liability insurance.
- You must have your application and all of the necessary documents submitted to the board at least 30 days before their quarterly meet. You can find their meeting dates and your deadlines right here on their site.
- Prime contractors must also register for and pass the Business/Project Management Exam. More info can be found on the exams on the companies website that issues them: psiexams.com
- If your business is registered as a corporation, you must register your business with the Alabama Secretary of State and provide a registration certificate with your application.
Unlike many states, you do not need to get a contractor bond to begin work as a licensed contractor in Alabama. However, if you’re planning to work on a project with third parties present on your building site — such as vendors, clients, or other independent contractors — bond insurance will protect these third parties in case of an accident. It’s important to note that liability insurance does not cover these parties on your work site, which is why being bonded as well as insured is recommended for all contractors. Your liability insurance carrier may offer common contractor bonds, such as surety bonds. Alternatively, bonding companies can offer any bond you may need.
Licensing Application and Renewal Fee Summary
Licensing and registration fees can quickly rack up during your application process. Your application and renewal fees will go as follows:
- Application Fee For Prime Contractors – $300
- Application Fee For Subcontractors – $150
- Annual Renewal Fee for Prime – $200
- Annual Renewal Fee for Subcontractors – $100
Accepted forms of payment on this are cashier checks, certified checks, and money orders. Do not send a personal or business check! They will not accept your application this way. Send this fee in with the application itself.
Alabama General Contractors License Exam
Prime contractor applicants will need to take and pass the Alabama Business and Project Management exam, as well as any trade exams required by the board. Testing will be administered by PSI testing.
Contractors Exam Fees
All examinations will be conducted through PSI testing. Here, you can schedule an exam, find exam locations, and pay necessary exam fees.
Alabama Contractor License Application
A step-by-step guide, including all paperwork and requirements, can be helpful for a painless licensing process:
- Determine which Alabama contractors license classification is for you.
- Print out, or complete the application packet online.
- Obtain your certificate of insurance.
- Prime contractors can now register for and take your exams. For more details on exams and how to register for them, visit the PSI exams website.
- Complete your questionnaire and booklet. Prime contractors will need a CPA for the financial statement, proof of experience — including references, work experience documents, etc.
- Fill out the application. Incomplete applications will not be considered, and you will have to wait even longer.
Additional Alabama Contractor Registration Required Documents
Required documents will be necessary to accompany your application. Don’t forget to include the following materials with your application:
- Proof of General Liability Insurance.
- Your completed booklet, with all of the sections finished, including references.
- For Prime Contractors, you will need to also submit passing exam scores.
- Pay Application Fees.
- Submit Application online, or mail to:
ALABAMA LICENSING BOARD FOR GENERAL CONTRACTORS
2525 Fairlane Dr.
Montgomery, AL 36116
Phone: (334) 272-5030
Fax: (334) 395-5336
Alabama State Business Licenses and Registration
As stated above, you must register and obtain your business license if you plan on performing contracting work as a company in the state of Alabama. For more information on business registration and licensing, visit the Alabama Secretary of State website.
Alabama Tax Identification Numbers and Registration
Businesses that operate within Alabama are required to register for one or more tax-specific identification numbers, licenses or permits, including income tax withholding, sales and use tax (seller’s permit), and unemployment insurance tax. Contact the Alabama Department of Revenue for more information about business registration and your tax obligations
Alabama Workers’ Compensation Insurance Requirements and Forms
Businesses with employees are required to carry workers’ compensation insurance coverage through a commercial carrier, on a self-insured basis, or through the state workers’ compensation insurance program. Visit the Alabama Department of Labor for more details.
Alabama Contractor License Search and Verification
To find and verify a licensed contractor or business in Alabama, visit the Alabama Licensing Board for General Contractors license roster search.