How to Start a Contracting Business in Virginia

Virginia's Board for Contractors sorts every licensed contractor into one of three classes, and which one you need is set entirely by how big your jobs get.

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What starting a Virginia contracting business actually involves

The class you need is set by project size, not trade. Class A covers a single contract or project worth $150,000 or more, or annual work totaling $1,000,000 or more. Class B covers a single contract from $30,000 up to $150,000, or annual work between $250,000 and $1,000,000. Class C covers anything smaller than that - and if you're an electrical, plumbing, or HVAC contractor in Class C, you also need a master tradesman license in that trade.

Financial responsibility scales with the class. For a Class B license, the firm has to show net worth or equity of at least $15,000, verified through a financial statement, a CPA-reviewed statement, or an audit - or post a $50,000 surety bond instead. Class A and Class C carry their own separate thresholds, so confirm the exact number for your class with the Board before you apply.

Every qualified individual needs real field time and a passed exam. A minimum of three years of experience in the specific classification or specialty is required, along with a board-approved exam - unless you qualify for an exemption under Code section 54.1-1108.1. The designated employee or a management-level team member also has to complete a board-approved basic business course.

Several categories of work don't need a license at all. Homeowners building or improving their own primary residence (limited to one every 24 months), owners repairing their own commercial or industrial property, and work valued at $25,000 or less per project performed for a licensed contractor are all exempt. Even exempt work still has to meet building code and get a certificate of occupancy before the property is sold to someone else.

Where people get stuck

The mistake is picking a license class based on what feels right rather than what the contract values actually are. Bidding or accepting a Class A-sized project while holding only a Class C license is a licensing violation regardless of how good the work is - check both the single-contract and annual-total thresholds before you commit to a job.

Not sure which class fits your project pipeline? Contractor Lane walks through the thresholds with you.

Where Contractor Lane comes in

Contractor Lane helps you match your real project sizes to the right license class, and gets your experience documentation and financial-responsibility proof lined up before you apply.

Build your free roadmap to get the sequence for your specific trade and target project size.

General educational information for people starting a business in Virginia. Requirements and fees change. Contractor Lane is not a law firm or tax advisor.

Common questions

What are Virginia's contractor license classes?

Virginia licenses contractors in three classes based on project and annual work value. Class A covers single contracts of $150,000 or more, or annual work of $1,000,000 or more. Class B covers contracts from $30,000 up to $150,000, or annual work between $250,000 and $1,000,000. Class C covers anything smaller, and electrical, plumbing, and HVAC contractors in Class C must also hold a master tradesman license. Source: Code of Virginia 54.1-1100.

What does it take to qualify for a Virginia contractor license?

A qualified individual needs at least three years of experience in the classification or specialty sought, plus a passed board-approved exam (unless exempt under Code section 54.1-1108.1) and a completed board-approved basic business course. For a Class B license, the firm needs net worth or equity of at least $15,000, verified by a financial statement, CPA-reviewed statement, or audit - or a $50,000 surety bond instead. Class A and Class C have their own separate financial-responsibility thresholds. Source: 18VAC50-22-50.