Licensing FAQ Central
Applying for a License FAQ
What is the first thing I should do if I am considering applying for a contractor's license?
The first thing you should do is determine if the name you want to use for your company is available through our office and then the Arizona Corporation Commission and Secretary of State in that order. Our standards for names are very strict while the standards for the AZ Corporation Commission and Secretary of State are minimal. Therefore, it is more likely that approval of a name from our office will also result in approval from either of theirs (although this something that we cannot guarantee). The reverse is not true. Often a contractor will request and be approved for a name through the AZ Corporation Commission and/or Secretary of State, spend large sums of money on advertising and other things to only find that another contractor already has the same or a similar name that may be confusing to others.
To make sure this doesn't happen to you, kindly fill out our Name Availability Form and if the name is available, we will immediately reserve the name for you for the next 90 days. There is no fee for this service. This will give you time to seek approval through the other entities and do whatever is necessary for you to apply for a contractor’s license.
Also see: Name Availability - Selecting Your Company Name
Will the Arizona Registrar of Contractors acknowledge receipt of my application?
Yes. You will receive a receipt with a pending number on it. This number is used to keep track of your application. If you have questions on the status of your application, you may use the pending number when calling in so that your application can be located more quickly.
How will I know if my application is approved?
When the application is received, a notice is mailed to you.
What happens if my application is not approved?
If your application can not be approved, you will be notified.
If my application is not approved, can I get a refund of the fees?
Yes. Your fees will be returned approximately two weeks after your application is returned to you. If your application is denied the fees will be forfeited.
Is there an examination requirement for a contractor's license?
Yes. The qualifying party for a contractor's license is required to pass business and trade examinations unless he or she meets the requirements of a waiver.
How will I find out if I have to take the examination?
The application instructions and test instructions should assist you in making a decision as to your need to test. If you are still unsure after reading those instructions, you may call the Licensing department at (602) 542-1525 for assistance.
Under what circumstances is a waiver of an examination granted?
There is no examination requirement if the qualifying party meets the following conditions:
- He or she is currently the qualifying party for an Arizona Contractors license in good standing in the same classification for which the new license is being requested; or
- He or she has been a qualifying party within the past five years for an Arizona Contractors license in good standing in the same classification for which the new license is being requested; or
- Within the past two (2) years, he or she has passed both the business and trade examinations in the same classification for which the new license is being requested.
Are there any additional circumstances under which a waiver of an examination may be requested?
Except for the waiver provided in the License Reciprocity section, there is no other circumstance under which a waiver will be allowed.
If I think that I am eligible for a waiver, must I complete the experience section of the application?
Even if you think that you are eligible for a waiver of an examination, you must complete the experience section of the application to document the minimum years of journeyman level experience.
All experience claims must be verifiable by a qualified and responsible person, such as an employer, fellow employee, other journeyman, contractor, union representative, building inspector, architect, or engineer. The person verifying your claim must have first hand knowledge of your experience, that is, he or she must have observed the work that you have done.
You are not required to document your experience if any of the following conditions exist:
- You are currently the qualifying party for an Arizona Contractors license in good standing in the same classification for which the new license is being requested.
- You have been a qualifying party within the past five years for an Arizona Contractors license in good standing in the same classification for which the new license is being requested.
Is a bankruptcy a reason to deny an application for a contractor's license?
A bankruptcy is not grounds to deny, suspend, or revoke a contractor’s license. The ROC cannot speculate if an application for a license will be granted or denied. Should you choose to apply for a contractor’s license, your application will be reviewed by the agency and a decision to issue or deny the license will be made on the merits of the application.
What examination(s) am I required to take and pass?
All Candidates are required to take and pass a Business Management Examination. Some license classifications also require passing a trade exam. Refer to form License Classification Requirements RC-L-206B for details on License Classification testing requirements.
What does the examination consist of?
There are two parts to the examination. All qualifying parties must pass the business management examination. In addition, the qualifying party must, if required, pass a second test covering the specific trade for which you are applying.
The business management test contains questions on state and federal laws and questions on the management of construction projects and business and financial management.
Information on individual trade exams may be found at http://candidate.psiexams.com/catalog/displayagencylicenses.jsp?catalogID=337 or by calling (800)733-9267.
How do I register to take the examination for a contractor's license or find answers to other frequently asked questions?
The PSI Candidate Information Bulletin (PDF) contains (1) instructions to register for exams, and (2) answers to commonly asked questions.
Bond Requirement FAQ
Are there any bond requirements for a contractor's license?
Yes. It is your responsibility to file a Contractor's Bond in the amount required for your license classification, and anticipated annual gross volume. The bond may be in the form of a surety bond or a cash bond. Additional information on bonding requirements is provided in the license application packet.
Residential contractors are also required to provide a consumer protection bond. This may be in the form of a Surety Bond or cash deposit in the amount of $200,000.00, or payment into the Residential Contractors' Recovery Fund. The application instructions provide detailed information on this requirement.
Where can I get a bond?
You may obtain a Surety Bond from your insurance agent or from another insurance company which is authorized by the Arizona Department of Insurance to operate in Arizona and issue contractors license bonds.
You may also provide a bond in the form of cash or a certificate of deposit from any bank which operates in Arizona. Contact any Arizona Registrar of Contractors office to obtain an alternative to cash assignment form if you wish to use a certificate of deposit for your license bond.
How long is a bond valid?
The surety bond must be continuous. This means that there is no termination date on the bond. You may be required to pay premiums to the insurance company periodically to keep the bond in force. The bonding company has the right to cancel the bond but must send a notice to you and the Arizona Registrar of Contractors thirty days prior to the cancellation date. You will have to replace the bond or your license will be suspended.
If your bond is in cash, the agency will retain the bond until two years after the license terminates. If no claims are made against the bond in that time, you may apply to have the bond released to you.
New applicant bonding requirements: What will the bond amount be?
On all new applications for any classification of license, the applicant shall estimate his anticipated gross volume of work within the State of Arizona for the remainder of the present fiscal year and shall be governed by the bond requirements herein before set forth as they apply to his particular classification of license. The filing of a bond or deposit in a specified amount shall be deemed to be the equivalent of submitting a volume estimate within the dollar limitations applicable for such bond amount.
Renewal bond requirements: What happens when it's time to renew?
All estimates made for renewal of licenses shall be made in such manner and upon a form acceptable to the Registrar of Contractors. The filing or continuation of a bond or deposit in a specified amount shall be deemed to be the equivalent of submitting a volume estimate within the dollar limitations applicable for such bond amount. The Registrar of Contractors is not responsible for over or under estimates of volume of work made by the licensee or for the sufficiency of any bond or deposit. A gross underestimate knowingly made by a licensee may be construed as a material misrepresentation and could subject the licensee to suspension or revocation of his license.
Can the bond amount be increased?
The amount of the contractor's license bond may be increased at any time during the fiscal year. However, a surety bond or cash deposit in lieu of bond cannot be decreased except at the time of renewal for the ensuing fiscal year.
When will the bond be effective?
Surety bonds or cash deposits shall not become effective until filed with the Registrar's office. If the effective date as shown upon the bond is after the date of filing with the Registrar, then the effective date shown upon the bond shall be the controlling date on which the bond becomes effective.
General Requirements FAQ
Who can apply for a contractor's license?
A business consisting of a sole proprietorship (individual), a partnership, limited liability company, or a corporation may apply for a contractor's license if they have a regularly employed person with the necessary experience, knowledge and skills who serves as the qualifying party. All persons listed on the application must be 18 years of age or older.
A corporation or limited liability company must be registered with the Arizona Corporation Commission and in good standing with that agency before submitting an application for a contractor's license. The corporation or limited liability company must remain in good standing in order to renew their contractor's license.
Who is responsible for contracting activities?
All persons listed on the license are responsible for the contracting activities of the business. "Person" means a qualifying party, an owner, any partner of a partnership, all members of a limited liability company, and any officer, director or owner of 25 percent or more of the stock of a corporation.
Who must be licensed as a contractor?
Any business which contracts or offers to contract to build, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, development or improvement, or to do any part of the work must be a licensed contractor.
Also included in work requiring a license is the erection of scaffolding, connections to utility service lines, metering devices and sewer lines, mechanical or structural service to a structure or improvement and any other work in connection with the project.
"Contractor" includes subcontractors, floor covering contractors, landscape contractors and consultants representing themselves as having the ability to supervise or manage a construction project for the benefit of the property owner.
Supervision or management includes hiring and firing of specialty contractors, scheduling of work on the project, and selection and purchasing of construction material.
Contractors must be properly licensed before submitting bids.
What is the Handyman Exemption? Must all contractors be licensed?
Please read the Arizona State Legislature's "Persons not required to be licensed; penalties" ARS §32-1121.A.14
To whom is the license issued?
A license may be issued to an individual, a partnership, limited liability company or a corporation. The license belongs to the business and not to the qualifying party.
If the ownership of a business changes, is the contractor's license considered to be part of the business?
No, with the possible exception of a corporation or limited liability company. If stock is sold and the file number assigned by the Arizona Corporation Commission remains the same, the same license can be used if the license is active and in good standing.
Experience Requirements FAQ
What kind of experience is required for a contractor's license?
Credit is given for experience as a journeyman, foreman, supervising employee or contractor.
- A journeyman is a person who has completed an apprenticeship program or is an experienced worker, not a trainee, and is fully qualified and able to perform the trade without supervision.
- A foreman or supervisor is a person who has the knowledge and skill of a journeyman and directly supervises physical construction.
- A contractor is a person who manages the daily activities of a construction business, including field supervision.
Contracting experience will also be considered from currently licensed Arizona contractors, formerly licensed Arizona contractors and the official personnel listed in our records for an Arizona contractor's license.
All experience claims must be verifiable by a qualified and responsible person, such as a homeowner, an employer, a fellow employee, other journeymen, a contractor, a union representative, a building inspector, an architect or an engineer.
The person verifying your claim must have first-hand knowledge of your experience, that is, he or she must have observed the work that you have done.
How much experience is required?
Refer to form License Classification Requirements RC-L-206B to determine License Classification experience requirements.
Are there education requirements for a license?
No. You do not have to meet any educational requirements in order to qualify for a contractor's license.
May I substitute any education, technical training, or apprenticeship training for the required experience?
You may receive credit for technical training, apprenticeship training, or education which may be substituted for a portion of the required four years of practical experience.
You must provide written documentation of any training or education claimed in place of experience. Acceptable documentation includes copies of apprenticeship certificates and college transcripts.
License Fees FAQ
What are the fees for a contractor's license?
The fees for a contractor's license depend on the type and class of license for which you are applying. There is a fee schedule at the end of this pamphlet. A fee schedule is also included with the application packet.
How long is a license valid?
A license is issued for two years and must be renewed biennially with the required renewal fees on the anniversary month of original issuance. A renewal notice will be mailed to the address on our records which you have provided.
Does Arizona recognize contractor's licenses issued by other states?
No. However, if you have trade experience or a contractor's license from another state, and you want to contract for work in Arizona, this experience may be acceptable to qualify for a license. In any case you must apply for and be issued a license by the Arizona Registrar of Contractors.
Does Arizona have reciprocity with other states regarding contractor's licenses?
The Arizona Registrar of Contractors has entered into a reciprocity agreement with the California State Contractor's Board, the Nevada State License Board, and the Utah State License Board. The Arizona Registrar of Contractors may waive trade examination requirements for contractors who want to be licensed in both states.
Under the agreement, Arizona can accept the licensing qualifications of these states. Applicants will be required to pass the Arizona Business Management examination and complete all other requirements for licensing in Arizona.
How can I qualify for this waiver?
In order to qualify for the trade test waiver option, the applicant shall:
- Have been licensed in good standing for a period of at least five consecutive years;
- Have taken and passed an equivalent trade exam in California, Utah or Nevada (Reciprocity with Nevada requires testing in electrical and plumbing trades.);
- Show proof, when submitting the application, of licensure in California, Utah or Nevada by providing a license verification form from their home state license board;
- Successfully pass the business management examination. Arizona retains the option to require the trade examination if it is in the best interests of the public.
To whom does the term "qualifying party" refer?
The "qualifying party" means a person who is regularly employed by the licensee and is actively engaged in the classification of work for which the person qualifies in behalf of the licensee.
The qualifying party must have the necessary experience, knowledge and skills to supervise or perform the contracting work.
Who can be a qualifying party?
The qualifying party may be the owner of a sole proprietor business, one of the partners of a partnership, one of the members of a limited liability company, one of the officers of a corporation or an employee of the contracting business.
What is the qualifying party required to do?
The qualifying person must pass the required examinations for the license.
The qualifying person must have the required years of experience as a journeyman, foreman, supervisor, or contractor in the classification for which he or she is applying. The usual experience requirement is four years, at least two years of which must have been obtained within ten years before applying.
For exceptions to the four year experience requirement, refer to the application for examination form.
While engaged as a qualifying party for a licensee, the qualifying party shall not take other employment that would conflict with his duties as qualifying party or conflict with his ability to adequately supervise the work performed by the licensee.
Can the same person serve as the qualifying party for more than one entity?
A person may serve as the qualifying party for one additional entity if one of the following conditions exists:
- There is a common ownership of at least twenty-five percent of each licensed entity for which the person acts in a qualifying capacity.
- One licensee is a subsidiary of another licensee for which the same person acts in a qualifying capacity. "Subsidiary" as used in this section means a corporation of which at least twenty-five percent is owned by the other licensee.