Established in 1931, the Board for Licensing Contractors sets the standards and qualifications for the general contractor license in the State of Tennessee. Before any person or business entity can bid, contract or perform construction projects of $25,000 or more, they must hold a general contractor license.
The Board for Licensing Contractors ensures that candidates are experienced and have the skills necessary to offer quality construction work. They also ensure that contractors operate using fair construction practices. The regulation of contractors protects both the consumer and community.
General contractors must operate and conduct business under the exact name in which they are licensed. The work that the person or business entity performs is dependent on the license classification which the contractor obtains. The State of Tennessee offers different licensing classifications for general contractors who perform commercial, residential and industrial work. There are also combined license classifications which allow contractors to perform work on commercial, residential and industrial properties.
Licensing Classifications for a Tennessee General Contractor License
- Class BC- Combined License. Allows the contractor to perform work on commercial, residential and industrial structures.
- Class BC-A- Residential Contractor License. General residential contractors are licensed to repair and remodel family residences with up to 4 units and residences that are under 3 stories tall.
- The State of Tennessee also offers a restricted version of this license, in which contractors are authorized to perform work on projects of $70,000 or less.
- Class BC-B- Commercial Contractor License. Commercial contractors are authorized to erect, alter, repair or demolish buildings utilized by the public, including buildings over 3 stories and those larger than 4 units.
- Class BC-b (sm)- Small Commercial Contractor License. Contractors must have a monetary net worth below $750,000.
- Class BC-C- Industrial Contractors. General industrial contractors are authorized to work on industrial structures such as plants used for manufacturing.
Important Note: The State of Tennessee also offers multiple combined licenses, in which contractors are authorized to perform commercial and residential work, or commercial and industrial work, etc.
Additional information of Tennessee General Contractor Classifications is available online.
Process to Obtain a Tennessee General Contractor License
- Obtain a copy of the Candidate Information Bulletin and prepare for the licensing exam.
- Register and pass the Business and Law Management exam through PSI. General contractors are also required to take and pass a trade exam that corresponds to the type of license classification they want to obtain.
- 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.
- Obtain a letter of reference from a past client, employer or codes official.
- Obtain worker’s compensation and general liability insurance if the business plans to have 1 or more employees.
- Complete the licensing application and submit it to the Board along with the required documentation and $250 application fee.
Important Note: Corporations, partnerships, both limited and general, and LLCs have the added step of registering with the TN Secretary of State.
The Examination Process
The first step in obtaining a Tennessee general contractor’s license is registering for and taking the qualifying examination. The State of Tennessee holds a contract with PSI Services to administer the examination.
The candidate taking and passing the examination for a company is known as the Qualifying Agent. The qualifying Agent is also responsible for holding the name on the general contractor’s license. This person can be a part of a sole proprietorship, partnership, LLC or corporation. They do not have to be an owner of the business.
Acceptable qualifying agents include:
- 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
Regardless of the licensing classification, all candidates are required to pass the Business and Law Management exam as well a Trade exam corresponding to their license classification. The Business and Law Management exam consists of 50 questions with an allotted testing time of 120 minutes. The Trade exams are made up of 100 questions with a testing time of 270 minutes; except for the BC-C Industrial Contractor Trade Exam, and the BC-b(sm) Small Commercial Contractor Trade Exam, which consist of 70 questions with candidates receiving 180 minutes to test.
Both the Business and Law Management, and the Trade exams require a passing score of at least 73%. All examinations are open-book.
PSI provides an information bulletin for candidates that include an exam registration form, as well as a breakdown of the material covered on the tests and suggested study materials. The bulletin provides step by step instructions for registration.
Along with the exam registration form, candidates are also required to submit a non-refundable exam fee.
Candidates are able to register:
- Online: Register on PSI’s website. Follow the link for new candidate registration.
- By phone: Call PSI 24 hours a day to use their automated system at (800) 733-9267. During regular business hours, representatives are standing by for assistance.
- Fax: Fax registration forms to (702) 932-2666. Allow approximately 4 business days for processing.
- By mail: Allow 2 weeks for processing when mailing the exam registration form. Mail the completed form and exam fee to:
3210 E Tropicana
Las Vegas, NV 89121
For online, telephone and fax registration, provide a valid Visa or Mastercard to pay the examination fee. When mailing the registration form, PSI accepts Visa, Mastercard, cashier’s check or money order. PSI does not accept company checks, personal checks or cash.
The Business and Law Management exam costs $44. Fees for the Trade exam vary by classification, but are between $38 and $44.
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:
- Johnson City
Important Note: Candidates can also make arrangements to take the exam at one of PSI’s out-of-state testing centers.
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:
- Government issued photo id, such as a driver’s license or passport.
- Identification with the examinee’s legal name and matching signature.
Examinees are given a copy of their score report, letting them know if they passed or failed the exam, before they leave the testing center. The Board requires that Candidates attach their score report to their licensing application, proving that they’ve 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 they did not pass. PSI does not allow candidates to register for exam retakes on the same day that they take the exam.
Important Note: Candidates 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, candidates must go through a number of steps and acquire specific documentation to submit along with their licensing application.
Candidates are required to 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.
Important Note: The financial statement must be in the name of the Qualifying Agent.
The Board for Licensing Contractors regulates the contracting industry in Tennessee by setting a monetary limit for all general contractors. This monetary limit determines the size of the job that the licensee can contract. In some cases the Board will increase the monetary limit with a line of credit or guaranty agreements.
Monetary limits are based on 10 times the applicant’s working capital and net worth. Previous contracting experience is also taken into consideration when establishing a monetary limit. A CPA is required to assist the applicant in determining their worth and preparing a financial statement.
When a candidate’s net worth is $1,500,000 or less, they are required to submit a financial statement with a ‘reviewed’ status, while those with a net worth of $1,500,000 or more are required to submit a financial statement with an ‘audited’ status.
In addition to a financial statement, the Board also requires that candidates submit a Letter of Reference. The Letter of Reference must be from an individual who has seen and knows first-hand, the candidate’s skill and quality of work.
Acceptable Letters of Reference may come from:
- Previous employer
- Codes official
At this time, businesses with one or more employees must obtain general liability and worker’s compensation insurance. Documented proof of worker’s compensation and general liability insurance must be attached to the licensing application.
Corporations, partnerships and LLCs must also register with the Tennessee Secretary of State. For more information and directions for how to register, contact the Secretary of State at (615) 741-2286.
Submitting an Application
Once applicants have met the licensing requirements and obtained the proper documentation, they are ready to fill out the general contractor license application. Application packets may also be obtained by calling the Board office at (615) 741-8307.
Read all information and directions in the application packet. Fill out the licensing application in full and provide all requested documentation, including the exam score report, CPA-prepared financial statement, and letter of reference, and if necessary, proof of insurance. The Board also requires an application fee of $250. Make checks payable to “Contractors Board.”
The Tennessee Board for Licensing Contractors meet bi-monthly throughout the year, during the months of January, March, May, July, September and November, to determine candidate eligibility.
All general contractor applications are due before the 20th of the month that the Board meets. 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
Upon receiving the application, the Board issues a letter notifying the candidate of receipt. It takes upwards of 6 weeks for the Board to review and process the application.
Be sure to respond promptly to any additional mailings from the Board, or requests for further information. Any additional information requested is subject to a deadline, which will be printed on the letter.
The Board also reserves the right to request an in-person interview with the Qualifying Agent. In this case, they will send a letter notifying the candidate 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.
Important Note: Not all candidates require an in-person interview.
In some cases, candidates can get their general contractor’s license in as little as 10 days if the owner of the business provides a hardship letter. More information on hardship is available online.
If the candidate is approved, they will receive a license certificate in the mail. The license certificate authorizes the candidate to begin contracting. The licensee will also receive a license card which contains an ID number, classification, monetary limit and expiration date.
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. General contractor license renewal applications are also available online.
Submit the renewal application 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, an affidavit and financial statement. Upon renewal, 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 ‘reviewed’ 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. Re-examination is not required 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?|
|$44||Business and Law Management Exam Fee||Upon registering for the Business and Law Management exam|
|$38-44||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 before the license expiration date|