Your construction company can face issues involving the proper licensing to bid or perform construction services. Here at Deutsch Kerrigan, contractors often ask our construction attorneys to answer questions regarding numerous licensing issues. We therefore thought it would be helpful to provide you an overview of the most frequent questions.
Your Licenses and Registration
The Louisiana State Licensing Board for Contractors requires you to have the following licenses applicable to the work that you wish to perform:
- Commercial license if you wish to bid or work on commercial projects having a contract value of $50,000 or more
- Residential license if you wish to bid or work on residential or home improvement projects having a contract value of $75,000 or more
- Mold remediation license if you wish to bid or work on projects having a contract value of $1 or more
- For home improvement projects between the contract values of $7,500 and $75,000, you need a home improvement registration.
Licenses are not transferable. You cannot transfer your licenses from yourself to someone else. Also, your licenses belong to you, not the company you own unless you are a sole proprietor. A corporation owns its license in the name of the corporation, not any of its shareholders or employees. Should you become the qualifying party for your company (see below), you cannot transfer your licenses from that company to any additional companies you form.
In addition to a contractor’s license, your company must have an occupational license from the city or parish in which it is located, but that license only gives you the right to operate your business there. It does not give you the authority to bid or perform work requiring a contractor’s license. The same applies to your company’s registration with the Louisiana Secretary of State’s office which gives you the right to operate your business in Louisiana.
Qualifying Parties
Your company’s qualifying parties are the people you designate to represent your company for purposes of complying with Louisiana’s contractors licensing law and rules and regulations. Qualifying parties must meet one of the following descriptions:
- You and/or your spouse if your company is a sole proprietorship
- You and/or another partner if your company is a partnership
- You if your company is an LLC and you were one of its original members
- You if your company is a corporation and you were one of its original incorporators or original stockholders
- Your full-time employees if they have worked for your company for at least 120 consecutive days
While there is no limit to the number of qualifying parties you can have in your company, your employees can only qualify for one parent company and two subsidiaries thereof.
Joint Ventures
If you wish to enter into a joint venture with another company or contractor, you and all other joint venture parties must be properly licensed before you submit a bid for the project. However, if the joint venture parties create a new business entity to submit a bid for a project, then that new business entity will need its own contractor’s license applicable to the work to be performed.
Subcontractors
The same licensing requirements hold true for any subcontractors on any of your projects in the following circumstances:
- Commercial projects having a value of $50,000 or more including labor and materials; Exceptions:
- Electrical, mechanical and plumbing require a commercial license with the appropriate classification for commercial projects having a value of $10,000 or more
- Asbestos, hazardous waste, lead based paint abatement or underground storage tanks require a commercial license with the appropriate classifications for projects having a value of $1 or more
For residential new construction, all subcontractors must be properly licensed on projects having a value of $7,500 or more on any new single family residential home, duplex, triplex or fourplex that are not more than three floors in height.
Out-of-state Projects
Your Louisiana contractor’s licenses do not authorize you to bid on or perform work in any state other than Louisiana. For instance, if you want to bid on or perform work in Mississippi, your Louisiana licenses will not suffice. You must hold a valid Mississippi contractor’s license to bid on or work jobs there. Be aware, however, that Louisiana has reciprocal agreements with many states, including Mississippi and Texas. You may be able to obtain credit in those states for the exams you passed in order to obtain your Louisiana licenses.
Whenever you need help resolving a construction issue or dispute, contact the construction team at Deutsch Kerrigan. Our attorneys have architectural and engineering training and experience, and are ready to help you achieve your goals.