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How to become a General Contractor in Washington State

The application costs & time it takes.


Here are the 7 steps we took to get our General Contractors License in Washington State & how much each step of the process cost:

  1. We incorporated our business as an LLP with the Washington Secretary of State. An LLC would be for a single owner. Here’s the link:

https://www.sos.wa.gov/corps/limitedliabilitycompaniesllconlineandpaperregistrations.aspx

  • On that page click: “file online”.

  • “Create a user account” and select option “free user account”.

  • Create a User ID & password as an Individual.

  • Input your contact information & address.

  • Click register.

  • A verification email will be sent to your email.

  • Click the “activate your account” link in the email from osos-corp@sos.wa.gov.

  • There will be a dashboard on the left side of the site.

  • Click “create or register a business”.

  • Select the type or form of business you’d like to register.

  • There will be several sections of a form to fill out all your information there and double check everything. This process may take 20 minutes to an hour.

  • Once you have completed the entire form click continue.

  • You will receive a UBI (Unified Business Identifier).


The processing fee is $200 and it takes about 2-3 business days for approval.


2. You will need an EIN. Here is the link to get one from the IRS:


https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers



3. Once your Entity is approved by the Secretary of State, the next step is to get a Washington State Business License. Here’s the link:


https://dor.wa.gov/open-business/apply-business-license

  • Create an account here https://secure.dor.wa.gov/home/Login

  • An activation code will be sent to your email from MyDOR.

  • Input the code and log in.

  • There will be several rectangular sections at the bottom of the page.

  • In the “Business Licensing” box click “apply for a new business license”.

  • Input some more profile information and click “save”.

  • The next page will ask for a UBI, click “start a business in Washington state” & click next.

  • Select the ownership structure of your business. Most likely it’s an LLC (It must be the same business structure as what you selected for the Secretary of State).

  • Next enter your UBI & select “this business was formed in Washington State.

  • There are 5 sections of this online application process, be prepared to input your SSN.

  • Enter your business purpose & personal information.

  • Input your “Doing Business As” name, this must be the same as the business name you applied to the Secretary of State with.

  • Then you can add any registered trade names you would like, each trade name costs an additional $5-$24.

  • Continue to fill out the form. The entire process may take 30minutes to 1 hour.


The processing fee is $90 plus $5-$24 for each additional trade name and it takes up to 10 business days to receive your license.


4. You will need to get a General Liability Insurance policy of:

  1. $200,000 in public liability and $50,000 property damage, or

  2. $250,000 combined single limit.

  • We got our insurance with Hiscox.

https://www.hiscox.com/small-business-insurance/general-liability-insurance

  • Your liability insurance policy must have L&I (Washington State Labor & Industries) listed as a certificate holder & use your exact business name. LNI is very particular about this as we learned, even an extra space and you’ll have to request new paperwork.


Our insurance down payment was $284.30 (in 2020) and our monthly payment is $94.75.


5. You will also need a Washington Continuous Contractor Surety Bond in the amount of:

  1. $12,000 for general contractors

  2. $6,000 for specialty contractors

  • We got our Surety Bond from:

https://www.suretybonds.com/

  • A Bond is purchased once every two years.

  • Again your liability insurance policy must have L&I (Washington State Labor & Industries) listed as a certificate holder & use your exact business name.


Our Surety Bond cost $120 for two years. You must renew your bond every two years.


6. You’re almost there. The next step is to fill out the Washington State Department of Labor & Industries Contractors License Application. Here is the link:


https://lni.wa.gov/forms-publications/F625-001-000.pdf

  • This application will need to be notarized. If you’re submitting the paperwork in person a customer services representative can notarize it for you. If you’re sending your application by mail UPS can notarize signatures. This costs between $15 & $25.


7. As of 8/23/2021 the L&I office is closed to the public. This was the case too in 2020 when we applied so we got our application notarized, put all our paperwork in an envelope and sent it to:


Contractor Registration

P.O. BOX 44450

Olympia, WA 98504-4450


Make sure to include all your paperwork, ie:

  • The business name and business structure you have chosen, or your business registration and UBI number from the Department of Revenue.

  • An original, completed Application for Contractor Registration with notarized signatures.

  • Your continuous contractor surety bond or assignment of savings.

  • Your certificate of general liability insurance.

  • A check for $117.90, payable to the Department of Labor & Industries.


The L&I application fee is $117.90, notarization is between $15 & $25, and postage costs extra.

If approved, your General Contractor's License will be mailed to you within 2-4 weeks of the application being received. It took about a month for our General Contractors License to be approved.



Total Approximate Cost of Obtaining a Washington State General Contractors License:


SOS: $200

DOR: $90+

Insurance Down Payment: $280+

Bond Payment: $120

Notarization: $15+

L&I: $117.90


Total: $822.90 +


Approximate Total Time to Obtain a Washington State General Contractors License:


SOS: 2-3 days

DOR: Up to 10 days

Insurance: 1-3 days

Bond: 1-3 days

Notarization: 1 day

L&I: 2-4 weeks


Total: 20 - 48 days, or more


Quarterly, Annually & Bi-Annually Follow Ups:


  1. Make sure you keep track of & file your sales taxes with the Washington Department of Revenue (the same place where you got your business license from.) Most likely you will be filing quarterly. This is different from personal annual taxes.

  2. Also, since you have to collect sales tax on your labor. So if you charge your clients a lump sum for materials and labor: apply for a Resellers Permit and fill out the sales tax exemption paperwork for every hardware store you purchase from, and pay sales tax to the state on that lump sum. To apply for a Resellers Permit from the Washington State Department of Revenue:

  • Log in to you Washington Dor Account.

  • Click “get started” on the MyDor Services page.

  • In the Rectangle labeled Excise Tax click “apply for/view a reseller permit”.

  • Continue until done.

It takes up to 60 days for resellers' permits to be approved but often they’re approved within 10 days.


3. Each year you will have to file an annual report with the Secretary of State.

4. Each year you will have to send LNI an updated Certificate of General Liability Insurance. Even if you’re paying for insurance, if LNI does not receive a copy of your policy every year, your license will be suspended. We learned this one the hard way.

5. Every two years you will need to renew your Surety Bond.

6. Every two years you will need to renew your General Contractor's License with L&I. The renewal fee is $117.90.


Things we do to make numbers easier:


  1. We have a business bank account, that is separate from our personal account. It makes the numbers easier to track. We use BECU. They’ve been great except the only thing with them is that you need 2 years of business history with them in order to take out a business loan.

  2. We keep track of all of our expenses and income in google sheets. There are many other ways to keep track of this but it’s a free option.

  3. We hired an accountant last year to file our annual taxes, since the paperwork for LLPs (&LLCs) is much more confusing than for just personal taxes.


Additional Resources:


https://lni.wa.gov/licensing-permits/contractors/register-as-a-contractor/


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