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General Contractor License in Tennessee

The State of Tennessee established the Board for Licensing Contractors in 1931 as a way to regulate their construction industry. Before a person or business is allowed to perform or contract work on projects worth $25,000 or more, they must hold a general contractor’s license.

Tennessee offers different licensing classifications, depending on the type of business the contractor plans to operate. Contractors have a choice of specializing in residential, commercial or industrial work.  There are also combined licenses which allow contractors to perform commercial and residential work.

The Board for Licensing Contractors has the responsibility of reviewing applications and determining if the contractor meets the qualifications needed to perform work in Tennessee.  The Board makes sure that contractors follow fair business practices and that their work is reliable and safe for the public.

*General contractors are required to work and conduct business under the exact name that they are licensed in the State of Tennessee.  

Licensing Classifications for a Tennessee General Contractor License

  • Class BC- Combined License- allows contractors to perform work on commercial, residential and industrial structures.
  • Class BC-A- Residential Contractor License- allows contractors to perform work on family residences with up to 4 units.  The residence must be less than 3 stories tall.    *The State of Tennessee also offers a restricted version of this license that allows contractors to perform work on projects worth $70,000 or less.  
  • Class BC-B- Commercial Contractor License- allows contractors to work on public buildings and structures of any size.
  • Class BC-b (sm)- Small Commercial Contractor License- allows contractors to work on projects similar to a Commercial Contractor (BC-B), but the value of the project is limited to $750,000 or less.
  • Class BC-C- Industrial Contractors- allows contractors to work on industrial buildings and structures, such as plants used for manufacturing.
*The State of Tennessee also offers multiple building and license sub-categories for contractors to become licensed.   

Click the link below for more information about general contracting license classifications in the State of Tennessee:

http://www.tn.gov/regboards/contractors/documents/ClassificationOutlineWeb.pdf

Process to Obtain a Tennessee General Contractor License

  1. Applicants must get a copy of the Candidate Information Bulletin and prepare for the licensing exam.
  2. Applicants must register for and pass the 2-part licensing exam, covering Business and Law Management and the trade of general contracting.
  3. Applicants must hire a Certified Public Accountant (CPA) to prepare a financial statement.  Financial statements help the Board determine the applicant’s net worth and working capital so they can set a monetary limit for each license issued.
  4. Applicants must obtain a letter of reference from a past client, employer or codes official.
  5. Applicants must get general liability and worker’s compensation insurance, if they plan on employing workers.
  6. Applicants must complete the licensing application and submit it to the Board along with the required documentation and application fee.
*LLCs, corporations and partnerships, both limited and general, have the added step of registering their business with the TN Secretary of State.

The Examination

The first step in getting a Tennessee general contractor’s license is registering for and taking the qualifying exam.  The exam is administered by PSI Services LLC.  General contractors and general contracting businesses are required to pass the exam before applying for their license no matter which classification they are applying for.

Businesses are required to have a qualifying agent, or person that is responsible for taking the exam on behalf of the business.  The following people are able to serve as qualifying agents for a business:

  • Owner or employee in a sole proprietorship
  • A partner in a general or limited partnership
  • Full-time employee or major stock holder of a corporation
  • Owner or full-time employee in an LLC

The exam is open book and requires a minimum passing score of 73%.  The exam consists of 2-parts:

  1. Business and Law Management- 50 questions- 120 minutes
  2. Trade Exam- 100 questions- 270 minues
*The Trade Exam for BC-C Industrial Contractors and BC-b(sm) Small Commercial Contractors is only 70 questions, and takes approximately 180 minutes.  

In order to prepare for the exam, PSI provides a Candidate Information Bulletin that contains information about the exam; a break-down of the topics covered and suggested study materials.  The Bulletin also contains a copy of the exam registration form.

For a copy of the Candidate Information Bulletin, click on the link below:

https://candidate.psiexams.com/bulletin/display_bulletin.jsp?ro=yes&actionname=83&bulletinid=200&bulletinurl=.pdf

Applicants must fill register for the exam and pay a non-refundable fee of $110.  Individually, each test costs $55.  Acceptable forms of payment include

  • Visa
  • Mastercard

OR when Registering by Mail

  • Cashier’s Check
  • Money Order
*PSI does not accept cash, personal checks or company checks.  

Applicants are able to register one of 4 ways:

  1. Online- Go to the PSI website and follow the link for new candidate registration www.psiexams.com.
  2. By Phone- Call PSI 24 hours a day to use their automated system.  Representative are standing by for assistance during normal business hours: (800) 733-9267
  3. Fax- Print a copy of the registration form found in the Candidate Information Bulletin and fax the completed form and credit card information it to PSI.  Allow approximately 4 days for processing: (702) 932-2666
  4. By Mail- Print a copy of the registration form found in the Candidate Information Bulletin. Mail the completed form and exam fee to:

PSI Services
3210 E Tropicana
Las Vegas, NV 89121

Once PSI processes the exam registration form, candidates will receive a list of available testing dates and locations.  It is the responsibility of the candidate to call PSI and schedule their exam.

Call PSI 24 hours a day at (800) 733-9267 and use their automated phone system to schedule the test.  Testing centers are located throughout the State of Tennessee in:

  • Chattanooga
  • Jackson
  • Johnson City
  • Knoxville
  • Memphis
*Candidates can also make arrangements to take the exam at one of PSI’s out-of-state testing centers if it is more convenient.    

On the day of the exam, arrive at least 30 minutes prior to the scheduled test.  Candidates are required to bring 2 forms of identification.

  1. Government issued photo id, such as a driver’s license or passport.
  2. Identification with the examinee’s legal name and matching signature.

Examinees are given a copy of their score report on the day of the exam, before they leave the testing center.  It is important for examinees to keep the original copy of their score report.  Original score reports are attached licensing application and submitted to the Board, proving that the contractor has passed both portions of the exam.

If the examinee does not pass one or both portions of the exam, they must re-register, pay the fees and retake the portion of the test that they did not pass.  PSI does not allow candidates to register for exam retakes on the same day that they take the exam.

*Candidates who applying for a Limited Residential Contractor License have the option of taking a ‘Limited License’ course at their local community college or vocational school.  Credit for this course takes the place of the BC-A Trade Examination.        

Preparing to Submit an Application

After passing both portions of the licensing exam, it is time to fill out and submit the licensing application.   There are a few steps applicants need to go through, and documents they need gather to submit along with their licensing application.

  1. Applicants must hire a Certified Public Accountant, or CPA to assist them in preparing a financial statement.  Financial statements are submitted along with the licensing application so the Board can determine a monetary limit for each licensee.  The monetary limit determines the size of the job that general contractors are allowed to work on.  The Board decides the contractor’s monetary based on the following:
    • Monetary limits are based on the contractor’s working capital and net worth.
    • The monetary limit is set at 10 times the lesser of the contractor’s working capital and net worth.
    • For example: if a contractor has $50,000 in net worth and working capital, their monetary limit is set at $500,000.
    • Monetary limits may be increased with a line of credit or guaranty agreement in some cases.
    • If the contractor is able to prove that they are worth $300,000 or more, there is no limit to the value of the job that they are able to contract.
    *For businesses, financial statements must be in the name of the qualifying agent, or person who took the exam.

    For more information about monetary limits, please visit:
    http://www.tn.gov/regboards/contractors/FAQ.shtml  

  2. Applicants must obtain one letter of reference from someone who is able to comment on their past work and experience.  The letter of reference must be from an individual who has first-hand knowledge of the applicant’s skills and the quality of their work.  Attach the reference letter to the licensing application.  Acceptable letters of reference come from:
    • Client
    • Previous employer
    • Codes official
  3. Applicants must obtain general liability insurance.  The amount of general liability insurance the contractor needs to carry is based on their monetary limit.  More information about general liability insurance is found in the licensing application packet.  Documented proof of insurance must be submitted along with the application.
  4. If the general contractor plans on employing workers they must obtain and submit proof of worker’s compensation insurance along with their licensing application.  More information about worker’s compensation insurance and possible exemptions is found in the licensing application packet.
  5. If the general contractor plans to operate a corporation or LLC, they must register their business with the Tennessee Secretary of State.  For more information, call: (615) 741-2286  OR  visit: https://tnbear.tn.gov/ecommerce/default.aspx

Submitting an Application

Once applicants have met the licensing requirements and obtained the proper documentation, they are ready to fill out the licensing application.

Application packets are available online at:

http://www.tn.gov/regboards/contractors/documents/LicenseApplicationWeb.pdf

Application packets are also available by calling the Board office at:  (615) 741-8307

Read all the information provided in the packet and follow all directions for filling out the application.  Be sure to provide all the requested documentation.  A completed application includes the following documents:

  • Original Exam Score Report
  • CPA-prepared Financial Statement
  • Letter of Reference
  • Proof of Insurance- including general liability and worker’s compensation, if needed
  • Proof of Registration with Secretary of State- if the business is a corporation or LLC

There is also a non-refundable application fee of $250, which needs to be submitted along with the application.  The Board accepts the following forms of payment:

  • Company Check
  • Personal Check
  • Cashier’s Check
*Make check’s payable to “Contractor’s Board.”  Cash and credit cards are not accepted.  

The Tennessee Board for Licensing Contractors meets every other month throughout the year, to determine applicant’s eligibility.  All applications are due before the 20th of the month on the month that the Board meets.  The Board meets during the months of:

  • January
  • March
  • May
  • July
  • September
  • November
*If the 20th of the month should fall on a holiday or weekend, applications are due the following business day.

Mail the licensing application, documents and fee to:

Board for Licensing Contractors
500 James Robertson Pkwy
Nashville, TN 37243-1150

The Board sends a letter to contractors letting them know that they received their application.  Be patient during the review process.  Sometimes it takes 6 weeks or more for the Board to review and process the application.

If the Board sends any additional mailings or requests any further information, be sure to respond quickly to avoid delays in the process.  Any additional information requested will have a deadline, which will be printed on the letter.

If a business is applying for a license, the qualifying agent may have to meet with the Board, in person, for an interview in some cases.  In this case, the Board will send a letter notifying the qualifying agent of the time, date and place of their interview.  The Board is likely to request an interview under the following circumstances:

  • The qualifying agent has previous bankruptcies, complaints against them or felony convictions
  • The qualifying agent has a lack of experience or cannot prove at least 6 months of employment.
  • The qualifying agent is not the owner of the business.

Once the application is approved, the contractor will receive their license certificate in the mail.  Once the contractor receives their license certificate, they are allowed to start contracting work.  The licensee will also receive a card that has their ID number, classification, monetary limit and expiration date.

*In some cases, contractors are able to get their license in as little as 10 days if the owner of the business provides a hardship letter.  For more information on hardship, go to:

http://www.tn.gov/regboards/contractors/documents/HardshipRequestForm.pdf

How Long is a Tennessee General Contractor License Valid?

A Tennessee general contractor’s license is good for 2 years.  Licenses are renewed every 2 years for a fee of $200.

Approximately 90 days before the expiration date, the Board issues a renewal application.  Renewal applications are also available online at:

http://www.tn.gov/regboards/contractors/forms.shtml

All renewal application must be submitted by mail.  The Board does not offer online license renewal.

All license renewal applications are due 30 days before the general contractor license is set to expire, to allow time for processing.  This also prevents general contractors from operating on an expired license.

Along with the renewal application, licensees are required to submit:

  • Proof of Insurance
  • Contractor’s Affidavit
  • Financial Statement
*When renewing their license, it is acceptable for the contractor to prepare their own financial statement, unless the limit is over $1,500,000, in which case the contractor needs a financial statement prepared by a CPA.  

If the general contractor does not renew their license within 12 months of the license expiration date, they must reinstate their license by submitting a new application and paying the licensing fee.  The exam is not required again unless the business is changing qualifying agents, or if the license has been expired for 24 months or more.

Table of Fees

FEE WHAT IS IT FOR? WHEN IS IT DUE?
$55 Business and Law Management Exam Fee Upon registering for the Business and Law Management exam
$55 Trade Exam Fee Upon registering to take the Trade exam
$250 Licensing Application Fee When submitting the licensing application
$200 License Renewal Fee 30 days for the license expiration date