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Building Contractor Licensing in Minnesota

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The State of Minnesota regulates residential remodelers and building contractors by requiring them to hold a license from the Minnesota Department of Labor & Industry (DLI).  A Building Contractor or Residential Remodeler License allows contractors to work on new and existing homes and accessory buildings with four units or less.  Licenses are issued to the contractor’s business entity, rather than the individual.

In order to become a licensed Building Contractor or Residential Remodeler in Minnesota, the contractor must choose an individual within their business to act as a qualifying person.  This person must meet the requirements and pass a pre-licensing exam.  The State of Minnesota does not have an education or work experience requirement for businesses to obtain a license.

The DLI also operates a Contractor Recovery Fund, which businesses must pay into at the time that they apply for or renew their license.  This fund protects the consumer in the event of loss or injury on the part of the contractor.

*There are some instances where the business may be exempt, or not required to obtain a license, such as commercial contractors.  For more information on who is exempt from holding a license, click the link below:

http://www.dli.mn.gov/ccld/rbcwho.asp

Process to Obtain a Building Contractor License in Minnesota

  1. All contractors are required to pick a business type, such as sole proprietor, partnership, LLC or corporation
  2. Businesses must choose a representative within their company to act as the qualifying person and pass the exam.  Sole Proprietors may act as their own qualifying person or hire a managing employee
  3. The qualifying person must apply for and pass the pre-licensing exam
  4. If the business is an LLC, LLP, Limited Partnership or corporation OR if the business is a sole proprietor or partnership using a name other than the full legal name of the proprietor or partners; they must register with the Minnesota Secretary of State
  5. Businesses must obtain general liability insurance in the minimum amount of $100,000 per occurrence with bodily injury limit of $300,000 and a property damage limit of $25,000.
  6. If the business plans to employ workers, they must obtain worker’s compensation insurance and unemployment insurance
  7. Businesses must complete the Residential Building Contractor/Remodeler- New License Application and submit it to the Minnesota Department of Labor & Industry along with all the required documents and fees.

Choosing a Business Structure and Qualifying Person

Before a contracting business can complete and submit the Building Contractor/ Residential Remodeler licensing application, they must first determine a business structure/type.

Contractors have the option of operating as:

  • Sole Proprietor/Individual
  • General Partnership
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Limited Liability Company (LLC)
  • Corporation

For more information on starting a business in the State of Minnesota, contact the Minnesota Department of Employment and Economic Development at: (651)-556-8425

OR

Visit:  http://positivelyminnesota.com/Business

Next, the contractor is required to choose a qualifying person to represent their company and pass the pre-licensing exam.  If the business is an individual/sole proprietor, they may act as their own qualifying person, or hire a managing employee.

The Minnesota Department of Labor & Industry (DLI) does not have any education or work experience requirements for the qualifying person.  Instead the qualifying person must be an owner, officer or managing employee within the business.

The following individuals may act as the qualifying person for the following business types:

  • Individual/Sole Proprietor- the individual or a managing employee
  • Partnership- one of the partners or a managing employee
  • Limited Liability Company (LLC)- chief manager or a managing employee
  • Corporation- chief executive, officer or a managing employee
*The DLI defines a managing employee as someone within the business who works full-time, receives a W2 and actively participates in the contractor’s business activities.  Independent contractors may not act as a qualifying person under any circumstances.

The Pre-Licensing Examination

Before applying for the exam, it is important that the qualifying person read and review the Residential Construction Contractor Licensing Examination Guide. This guide goes over the test format and provides sample test questions which help the qualifying person prepare for the exam.  For a copy of the exam guide, click the link below:

http://www.dli.mn.gov/ccld/PDF/exam_guide.pdf

The exam takes approximately 4 hours to complete, and consists of 110 multiple choice questions, covering:

  • The practice of construction, including building codes
  • Construction business and law in the State of Minnesota

A copy of the State Building Code will be provided for use as a reference during the test.

To apply for the pre-licensing exam, the qualifying person must fill out the Residential Contractor Examination Application. For a copy of the application, please visit:

http://www.dli.mn.gov/ccld/PDF/rbc_exam.pdf

When filling out the exam application, please print clearly in blue or black ink.   Specify whether the business is applying to take the Residential Building Contractor or Residential Remodeler exam.  To avoid processing delays, the qualifying person may also fill out the exam application online and submit it at the link below:

https://secure.doli.state.mn.us/license/intro.aspx

There is a $50 non-refundable examination fee which must be submitted along with the exam application.  The DLI accepts payments in the form of company and personal checks, or money order made out to “Department of Labor & Industry”. The DLI does not accept cash by mail or walk-in at any of their office locations.

The exam is given at the following DLI office locations:

  • St. Paul
  • St. Cloud
  • Duluth
  • Detroit Lakes
  • Owatonna
  • Granite Falls

For more information on test dates and locations, please visit:

http://www.dli.mn.gov/ccld/exam_schedule.asp

On the day of the exam, please arrive at least 15 minutes before the scheduled test begins to allow time for parking and registration.  A minimum score of 70% is needed to pass the pre-licensing exam.  The qualifying person will receive a notice from the DLI with along with their exam results.  If the qualifying person passes the exam, they will also receive instruction on how to apply for the license.  The notice with the exam results will be submitted to the DLI at the time the business submits the license application.

If the qualifying person does not pass the exam, they must wait 30 days and then re-apply, pay the exam fee and take the exam over again.

Preparing to Submit an Application

Once the qualifying person passes the exam, there are a few more steps before they can submit a license application.

The following business types are required to register their business with the Minnesota Secretary of State:

  • Limited Liability Companies (LLC)
  • Limited Liability Partnerships (LLP)
  • Limited Partnerships (LP)
  • Corporations

Additionally, general partnerships and sole proprietors who plan on using an assumed business name for their contracting business (a name other than the proprietor or partners’ full legal name/names) are also required to register with the Minnesota Secretary of State.

A certificate showing that the business has filed with the Secretary of State must be submitted along with the license application.  This registration is renewed once a year and must be kept in an “active” status while the contractor conducts business.

For more information on registering with the Minnesota Secretary of State:

Please call (651)-296-2803 or 1-877-551-6767

OR

Visit: http://www.sos.state.mn.us//index.aspx?page=92

All business types are also required to obtain general liability insurance in the minimum amount of $100,000 per occurrence with a $300,000 limit for bodily injury and a property damage limit of $25,000.  The DLI also accepts a policy with a combined bodily injury and property damage limit of $300,000 per occurrence and an aggregate limit of $300,000.  Liability insurance must remain continuous and active throughout the business’ license term.

The DLI requires that the liability insurance provider be licensed by the Minnesota Department of Commerce.  A certificate of insurance must be submitted with the license application.  The certificate must list Department of Labor & Industry as the insurance holder.  It must also contain the Construction Codes Licensing Division (CCLD) address:

CCLD Licensing Services
443 Lafayette Road N.
St. Paul, MN 55155

If the contracting business plans to hold employees they must obtain a Federal Employee Identification Number (FEIN) as well as a Minnesota State Tax Identification Number.  They must also hold unemployment and worker’s compensation insurance.

Please call the following numbers for more information:

  • FEIN: 800-829-4933
  • State Tax ID Number: (651)-282-5225
  • Unemployment Insurance: (651)-296-6141
  • Worker’s Compensation Insurance: (651)-284-5032
*If the business plans on making retail sales, they are also required to obtain a Corporate Sales Tax ID Number.  Please call: (651)-296-6181

Submitting an Application

For a copy of the Residential Building Contractor/ Residential Remodeler- New License Application, please visit:

http://www.dli.mn.gov/ccld/PDF/rbc_residential_contractor_remodeler13.pdf

Be sure to read all instructions and follow all directions before filling out the application.  Be sure to fill out all forms in the application packet, including:

  • Disclosure of Business Owners, Partners, Officers and Members Form
  • Qualifying Person Designation Form
  • Background Disclosure Form
  • BCA Form (Bureau of Criminal Apprehension Criminal Background Check)
  • Certificate of Insurance Form
  • Certificate of Compliance Form (Minnesota Worker’s Compensation Law)
*Please note that the Background Disclosure Form applies to business, financial and criminal litigation histories for all owners, members, partners, managing employees and qualifying persons within the business.  If a “yes” answer applies to any questions on this form, a separate sheet of paper with a written explanation is required.  

All information provided on the application must be truthful and accurate.  Be sure to include all the required documents and information to avoid delays in the licensing process.  Do not forget to sign and date the application.  A completed application contains the following documents:

  • Qualifying person’s exam results
  • Certificate of current general liability insurance
  • Secretary of State filing (if applicable)
  • Copy of Articles of Incorporation/Organization if the business is an LLC or Corporation

Additionally, the license fee must be submitted along with the application.  The license fee amount depends on the volume of the contractor’s business.  Refer to the chart below to determine the license fee amount:

License Fee Amount Annual Gross Receipts
           $670 Less than $1 million
           $770 Between $1 million and $5 million
           $870 More than $5 million
*License Fee Amounts in the above chart include an initial $220 license fee and the amount required for the Contractor Recovery Fund, which is based on the business’ gross annual receipts.  

The DLI accepts payments in the form of check or money order, made payable to the “Department of Labor & Industry,” when the application is submitted by mail.  When the application is submitted online, the DLI accepts payments by credit card.  Cash payments are not accepted in-person, online or by-mail.

To upload the completed application and pay by credit card, please visit:

https://secure.doli.state.mn.us/license/intro.aspx

Otherwise, mail the completed application, documents and fee to:

Minnesota Department of Labor and Industry
Construction Codes and Licensing Division
Licensing and Certification Services
PO Box 64217
St. Paul, MN 55164-0217

It takes approximately 7 to 10 business days for the DLI to process the application.  If the application is approved the DLI will mail the business their license certificate.  In the meantime, contractors may use the DLI “License Lookup” tool on their website to see if their application is approved or pending.   To access this feature, please visit:

https://secure.doli.state.mn.us/lookup/licensing.aspx

Once the business receives their Building Contractor/ Residential Remodeler License, they are required to display their license number on all:

  • Contracts
  • Proposals
  • Permits and Applications
  • Company Vehicles
  • Billboards, Signs and Fliers
  • Business Cards
  • Marketing Materials

For additional questions about the application or licensing process, please contact the DLI Licensing Unit:

By Phone: (651)-284-5034

By Email: license@state.mn.us

How Long is a Minnesota Building Contractor License Valid?

A Building Contractor/Residential Remodeler License is good for a period of 2 years in the State of Minnesota.  All licenses are set to expire on March 31st.  Be sure to complete the renewal forms and pay the renewal fee prior to the expiration date to allow time for processing.

For a copy of the renewal instructions and renewal packets, please visit the link below:

http://www.dli.mn.gov/ccld/RBCContractorRemodApp.asp

Please refer to the chart below to determine the appropriate renewal fee:

Renewal Fee Amount Annual Gross Receipts
      $690 Less than $1 million
      $790 Between $1 million and $5 million
      $890 More than $5 million
*Renewal Fee Amounts listed in the above chart include the $220 application fee, as well as the Contractor Recovery Fund Fee and $20 towards continuing education courses.  

In addition to renewing the Building Contractor/ Residential Remodeler license, the business’ qualifying person is also responsible for completing 14 hours of continuing education courses.  Continuing education courses must be approved by the DLI.  The deadline for completing continuing education depends on when the qualifying person passed the pre-licensing exam.

To view a list of DLI-approved courses, please visit:

https://secure.doli.state.mn.us/ccldcecourses/

Table of Fees

Fee What is it For? When is it Due?
     $50 Pre-Licensing Exam Fee Upon applying for the exam
$670 Initial License/Contractor Recovery Fund Fee for businesses with gross annual receipts less than $1 million Upon submitting the license application
$770 Initial License/ Contractor Recovery Fund Fee for businesses with gross annual receipts between $1 million and $5 million Upon submitting the license application
$870 Initial License/Contractor Recovery Fund Fee for businesses with gross annual receipts of over $5 million Upon submitting the license application
$690 Renewal/Contractor Recovery Fund/Continuing Education Fee for businesses with gross annual receipts less than $1 million Upon submitting the license renewal application
$790 Renewal/Contractor Recovery Fund/Continuing Education Fee for businesses with gross annual receipts between $1 million and $5 million Upon submitting the license renewal application
$890 Renewal/Contractor Recovery Fund/Continuing Education Fee for businesses with gross annual receipts over $5 million Upon submitting the license renewal application