![]() And you know the state isn’t going to forget about its taxes. Some states and cities require contractors to secure bonds as well. States want contractors to carry certain insurances, such as liability insurance and worker’s compensation. Learn more – Construction Law: What Contractors, Subs, and Suppliers Must Know RegulationĬontracting is highly regulated, and one of the best ways for states to keep track of individual contractors is through licensing. #Different types of licenses in texas license#The business law section typically covers best practices, tax rules, business ethics, and other vital aspects of fair business.īetween the trade and business sections, contractors have to prove their worthiness to carry a license and contract with the public. #Different types of licenses in texas how to#Trade knowledge ensures that contractor applicants know how to do the job properly. Most states that offer contractor licensing exams have at least two main sections: trade knowledge and business law. What better way to see if a contractor knows the rules than making them prove it on a written exam? Contractors also need to run fair and ethical businesses, and states need to ensure they do so to protect consumers. Consumer protectionīuilding isn’t the only aspect of running a contracting company. Contractors that don’t carry licenses may very well know what they’re doing, but there isn’t any proof of that at the state level.įor that reason, states will track down unlicensed contractors, shut down their jobs, and force them to pay fines before pursuing licensing. The state regulatory boards want to ensure that a contractor knows the proper header thicknesses, how to wire an electrical panel, how to ensure a gas-fired water heater is running properly, and how to handle many other potentially dangerous situations.īy testing the contractor’s trade knowledge, the state gains a baseline on a contractor’s industry know-how. One of the most important reasons contractors have to carry licenses of some type is for safety’s sake. Most of these reasons are to ensure that the contractor is capable and responsible on several different levels. ![]() But the truth is, there are plenty of good reasons why they exist. On the surface, a contractor license might seem like just another hurdle in starting a business. The Bottom Line: Licensing can protect contractor payment rights. ![]()
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