Contractor licenses in Illinois can only be obtained by following the process outlined by your local city and/or county. Of note, general contractors are not regulated at the state level (unlike plumbing contractors). Instead, nearly all construction licenses are regulated by the applicable city and county in which work is being conducted. The requirements to obtain a general contractor license will most likely depend on where you live. Therefore, along with this guide, it is important that you check any additional requirements that your city, county, or local jurisdiction may also require. Indeed, your local department is where you will get your Illinois general contractor’s license, and every city and county in Illinois may have slightly different requirements. You can begin this process by simply making a call to your local township hall or county registrar.
There are, however, a number of steps that you will need to complete before jumping through your local general contractor requirements. To help parse through the general contractor license steps that might otherwise seem too complex or archaic, below is a step-by-step guide to help you get you on your way to obtain your general contractor license in Illinois. The article concludes by discussing how you can become licensed in the biggest city in the state, Chicago. This could also help you understand what requirements you will face in other counties/cities in Illinois.
Preliminary General Contractor Considerations in Illinois
General License Requirements
When you begin reviewing the general contractor process, you will want to review the Illinois Department of Public Health website if you anticipate, now or in the future, working with irrigation, plumbing, removal of asbestos, or removal of lead. These steps require special licenses that should be obtained in conjunction with the below.
Illinois Business License/Registration?
As an initial step, you should create a business entity to hold your general contractor license. You can create a limited partnership, limited liability partnership, limited liability corporation, C or S corporation, or a not-for-profit entity. Creating a company initially will likely limit any liability that you could potentially face in the future at a job site.
Tax Identification Number
When operating within Illinois, a business must register with the Illinois Department of Revenue to receive any licenses or permits and comply with all income tax withholding requirements, unemployment insurance taxes, and sale and use taxes.
Workers’ Compensation Insurance
After registering with the state, as a general contractor with employees, you must now contact an insurance broker/agent to obtain workers’ compensation insurance coverage. Your agent can walk through what policies are best for your business.
Contractor License Verification
Illinois offers a free database to verify that a business has the proper licenses. Once you finalize all of your licensing, please head to the Illinois Department of Financial and Professional Regulation to confirm that you are ready to legally begin your journey as a general contractor.
Becoming a General Contractor in Chicago
Chicago Business License
After completing the above steps, if you decide to become a general contractor in Chicago, you will next need to acquire a business license from the City of Chicago Business Affairs and Consumer Protection Department.
Determining if You Need a Chicago General Contractor License
The Chicago Municipal Code defines a general contractor generally as any person who intends to submit bids or offers to conduct any beneficial construction work on a building within the city.
Five Types of General Contracting Chicago Licenses
Depending on what type of construction work you intend to do, you may need one or more of the following Chicago licenses:
(1) Class A: Any contract project value,
(2) Class B: A contract project value not to surpass $10 million,
(3) Class C: A contract project value not to surpass $5 million,
(4) Class D: A contract project value not to surpass $2 million, and
(5) Class E: A contract project value not to surpass $500,000.
Fees Associated with General Contracting Chicago Licenses
Different application fees apply depending on the license classification. Specifically, the following Chicago general contractor licensing fees apply:
(1) Class A: $2,000,
(2) Class B: $1,000,
(3) Class C: $750,
(4) Class D: $500, and
(5) Class E: $300.
The applicable license fee should be mailed with your application.
Chicago General Contractor Application
After determining what class of license you need, the next step is to complete a general contractor license application that you must submit to the City of Chicago Department of Buildings. This application requires that you explain
(1). Your business structure and company background/general information,
(2). The classification of license that you are requesting,
(3). Verify via affidavit that the business or a business member is financially stable,
(4). Name the City of Chicago as an “additional insured” and include the certificate of insurance in the application (contact your insurance agent to effectuate this requirement),
(5). Describe, in general terms, the general contracting work that you anticipate your company will complete, and
(6). Sign the completed application and pay all applicable fees.
Next Steps after Application is Submitted
You should expect a response from the City of Chicago within 28 days after submitting the application. If your application is subsequently approved, your license will be mailed to you within ten days thereafter. Once licensed, it is very likely that you will need to pay for a surety bond – a promise from a third party to your client that will provide your client with the opportunity to recover its loses, etc. if you do not complete the work. The third party (called a surety) will then seek recovery from you for the amounts it paid to your customer (because you did not complete the job). Surety bonds are common in the industry and only applicable if you fail to fulfill your contractual obligations to your customer.
References
(1). Illinois Department of Public Health – http://www.dph.illinois.gov/
(2). Illinois Secretary of State – https://www.cyberdriveillinois.com/departments/business_services/home.html
(3). Illinois Department of Revenue – https://www2.illinois.gov/rev/Businesses/Pages/default.aspx
(4). Illinois Workers’ Compensation Commission – https://www2.illinois.gov/sites/iwcc/Pages/default.aspx
(5). Illinois Department of Financial and Professional Regulation Compensation Commission – https://generalcontractorlicenseguide.com/illinois-contractors-license/
(6). City of Chicago Business Affairs and Consumer Protection Department – https://www.chicago.gov/city/en/depts/bacp/supp_info/license_applicationrequirementsinformation.html
(7). City of Chicago Department of Buildings – https://www.chicago.gov/city/en/depts/bldgs.html
(8). Chicago Municipal Code – http://chicago-il.elaws.us/code/bucoreex_d1_subd116_ch4-36_sec4-36-010
