How do licenses and permissions for contractors and buildings work?

Licenses and permits for construction and contractors demonstrate to potential customers that your business is capable of handling the task and compliant with local building rules. They can also prevent you from receiving penalties that have a negative influence on your bottom line. Before starting new projects, construction firms and building contractors often need to secure building permits from the relevant municipal authorities. In certain cases, they would also need to be licensed.

You must submit an application for a general business license if you’re simply establishing a construction or contracting firm. Depending on state and municipal regulations, the kind of projects you work on, and other factors, you may require extra specialist contractors or construction licenses. While some states have broad criteria, depending on your business’s specialty, you could need additional licenses. Many licensing authorities will charge fees and require you to complete examinations to get a certification, and electricians, drywallers, roofers, and other construction businesses may need to seek licenses from industry groups. Even while licensing for construction professionals is not required by all jurisdictions or sectors, it still has advantages. Obtaining a professional license or certification might offer you an edge over rivals, and certain important clients would only choose licensed construction firms and contractors. If a customer refuses to pay you for your job, building licenses may be able to assist you to recover damages in some areas.

Your company will need to secure a building permit for the majority of construction projects and many home renovation tasks. Obtaining a construction permit typically comprises the following steps, however, the procedure varies by location:


  • filling out an application
  • creating and submitting a building blueprint and construction site plan, sometimes with assistance from an architect
  • scheduling a meeting with the city or county, which might take weeks or months if amendments are required, to obtain permission for a construction proposal.
  • scheduling routine checks while working
  • ultimate clearance from the neighborhood’s building authority

Possessing the necessary licenses and permissions demonstrates your legitimacy as a company, and purchasing insurance and bonds gives clients peace of mind that they won’t be held responsible for damages if something goes wrong during an expensive project.