Are you planning to start a business as a contractor in Oregon? If so, this guide will help you in the process of obtaining your Oregon contractor’s license.
Most contractors need to get licensed as such in order to operate legally in the State of Oregon. The licensing requirement mainly concerns specialties such as roofing, painting, carpentry, plumbing and many others, but only if the work involved is priced above $500. You can check whether you need a construction contractor’s license here.
How do you get licensed in Oregon, then? Check out the most important tips on licensing and bonding below:
Get your contractor’s license
The first step to getting an Oregon contractor’s license is consulting the Construction Contractors Board, the authority in charge of licensing. The Board’s website can provide you with all the necessary documents and requirements for obtaining your license.
The main prerequisite for getting a license is appointing one member of your business as the Responsible Managing Individual (RMI). This person will need to pass a test in Business Practices and Law, as based on the Oregon Contractors Reference Manual. They’ll need to register for the exam, pay a fee of $85 and pass it successfully. The exam results are valid for 24 months.
Step 1: Choose a Responsible Managing Individual (RMI) for your contractor business
Many businesses choose to do special training before the exam. You should consider one of the training providers approved by the Board. Once the RMI has passed the required training, they’ll need to register with Prometric to schedule the exam.
Once the exam has been passed, you can fill in and submit your license Application Form. Instructions and the list of requirements are included right on the form.
Here’s a quick breakdown of the requirements. One of them is registering your business with the Oregon Secretary of State as a sole proprietor, LLC, LLP or other format options. You may be asked to provide your Business Identification Number, as well as your Employer Identification Number in some cases. You might also need to obtain workers’ compensation insurance from the Workers’ Compensation Division. The application includes a criminal background check and a construction debt check.
The final step is obtaining general liability insurance and a surety bond. The bonding and insurance amounts differ depending on the kind of license you are getting, namely residential or commercial, with a few possibilities for each of these. You can check the options and amounts here or scroll down.
Get your contractor’s license bond(s)
To get your license in Oregon, you will need to get a contractor’s license bond to fulfill the last indispensable requirement.
The bonding amounts vary, depending on your company type:
- Residential general contractor: $20,000
- Residential specialty contractor: $15,000
- Residential limited contractor: $10,000
- Residential developer: $20,000
- Commercial general contractor level 1: $75,000
- Commercial general contractor level 2: $20,000
- Commercial specialty contractor level 1: $50,000
- Commercial specialty contractor level 2: $20,000
- Commercial developer: $20,000
The numbers may seem high, but don’t be alarmed. The cost of a surety bond (i.e. what you’ll have to pay) is only a percentage of the bond amount.
Sellwood Bridge Construction in Portland, Oregon
If you are planning to participate in public projects, then you will also need to obtain several contract bonds, including a bid bond, a performance bond and a payment bond. Contract bonds apply only to the project for which you are bidding, so you’ll need to reapply with each new bid.
Going back to the contractor license bond required in the licensing process, don’t forget that this bond is protection for the public, not for your own business. Its aim is to guarantee your compliance with state regulations in your business operations. This acts as a safety net for your clients, assuring them that you are a reliable contractor and protecting them if something doesn’t work out.
Getting an Oregon contractor’s license bond is possible even with bad credit. This is so because JW Surety Bonds has access to high risk markets. When evaluating applicants, most agencies consider a multitude of factors such as personal and business finances and professional experience, which inevitably makes the bond price higher and the bonding process more complicated. JW Surety Bonds, however, looks only at the credit score of applicants. Furthermore, due to our large volume of bond writing, JW Surety Bonds provides bad credit bonding at lower rates than any other agency. Apply online to get an instant quote.
Get your business going
With easy access to all the necessary documentation required for the licensing process in Oregon, we hope you feel well-prepared to start your contractor business.
Still have questions about the bonding requirement? Contact us to get them all answered.