Can I be an unlicensed GC?

Question

I've recently just started a new contracting LLC with myself as the sole owner and only person in the LLC. The goal is to work for investors doing some of the rehab work and gaining the knowledge and experience at the same time.

According to MN and ND law (I'm right on the border of both) I need to have an actual license to do any work on properties since I'm doing more than one task. Duties will range from carpentry, flooring, roofing, painting, etc. I keep hearing on podcasts about people going only with licensed and insured contractors so I assumed there was a choice in the matter. Am I wrong? Is it because I'm technically considered a GC since I'm doing more than one task? Can't I just be a handyman?

ALSO, I did learn its cheaper to set up the LLC in ND and get the license there as opposed to MN. Any guesses as to which one state I formed the entity in?

Michael Moikeha · Answer

Good luck with your new entity. Not a bad way to get yourself some hands on training!

Steven J. · Answer

I am working in ND while the LLC is physically located in MN. ND and MN both require license to do jobs as big as I'll be doing. From what I've read it appears that I need a ND contractors license to work in ND and a MN license to work in MN. I just need to register my LLC as a foreign entity in ND and then I can get my license.

I can get licensed in each state, and for the time being I may just work in ND. Make sense?

Jon Holdman · Answer

Are you working in ND?  If you're working in MN I can't see how having a license in ND helps at all.  I think you may be confusing where you're created your LLC and where you have a license.  The two are unrelated.  If you're working in MN and want to make claims about being a licensed GC you need an MN license.

Chris Christianson · Answer

MN now issues Licenses for 2 years and includes a dead beat contractor recovery fund you must pay into thus the price.  You also need to be lead certified and I recommend that no matter which state you operate in.  You don't want someone knocking on your door in 5 years saying their kid is stupid and since you disturbed some paint 5 years ago it must be your fault.

Another option for you, focus on commercial projects.  This includes agricultural buildings, apartments with more than 4 units or any commercial building.  A contractors license in MN is actually called a Residential Builders License and is only necessary for residential jobs.  The theory is that commercial investors are savvy enough to watch out for themselves.  You can legally GC a 55 floor apartment building in Downtown Moorehead tomorrow if you can land the job.  Just don't sell Mr. and Mrs. Smith a patch and paint job till you get the license.

Steven J. · Answer

Thanks for the reply, Jon. I did a little more digging and ND requires a license but there is no book test nor training and the cost is 50 bucks as long as my individual contracts are under 50k. I did establish in MN so I'll have to be a domestic entity that is licensed in ND; seems that I can do that quite easily. Really all ND requires is that I'm insured properly and I carry workers comp if I have employees. MN requires testing and about $700 in licensing fees so ND it is.

ND contractor license should also help me more quickly build my legitimacy and experience as a contractor.

Jon Holdman · Answer

A GC license from ND is irrelevant if you're working in MN.  Unless they have some sort of reciprocity agreement.  Around here, GC licenses are specific to each city.

If you're unlicensed (here) you can't pull permits.  Even with  a license you still need licensed subs for some trades - mechanical, electrical and plumbing, commonly.

Getting a GC license is typically just a matter of taking a test and paying the fees.  There are companies that will help you prep for the test.  When I checked into it, it was an open book test.  They gave you a copy of the relevant codes and you could use them to answer the questions.