Do You Want to be a Contractor in Washington State?
To become a contractor in the state of Washington, businesses or individuals must adhere to specific procedures and requirements. Below, we present an 8 step guide to obtaining a contractor’s license in Washington. Dive in to navigate the essential steps and ensure you’re on the right path to legitimacy and success in your contracting endeavors.
1. Choose the Structure of your Business
Various business structures offer different advantages and disadvantages, catering to diverse needs. Here are some of the most popular business structure types and a quick summary about them:
- Sole-Proprietor: Simplest form, owned by one individual, who is personally liable for business debts.
- Partnership: Similar to a sole proprietorship but involves two or more individuals sharing ownership, profits, and liabilities.
- Corporation: A distinct legal entity separate from its owners, providing limited liability, with shareholders, directors, and officers.
- S-Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to shareholders for federal tax purposes.
- Limited Liability Corporation (LLC): Blends features of a corporation and partnership, offering personal liability protection with flexible management.
2. Register with Washington Secretary of State
Step 2 is to register with the Secretary of State. To do this, submit all required documentation and pay fees. For more information about this process, refer to the links below. Here you will find information on filing fees, required documentation, licensing renewals, and more.
3. Complete the Online Business Application
To complete the Business Application, go online to the Department of Revenue’s website. Once you have filed your application, you will receive a Uniform Business Identifier (UBI) number. A UBI serves as a unique identification number assigned to businesses or entities for tracking and regulatory purposes. In the context of taxation and business registration, a UBI is often used by government agencies to uniquely identify a specific business entity. This identifier is essential for various administrative functions, such as tax reporting, licensing, and regulatory compliance.
- Receive Uniform Business Identifier Number (UBI)
4. Get IRS Employer ID Number (EIN) if you plan to have employees
An Employer Identification Number (EIN) is a unique nine-digit identification number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States. Also known as a Federal Employer Identification Number (FEIN), the EIN is used primarily for tax purposes.
- Call IRS: 1-800-829-4933
5. Fill out the Application for Contractor Registration (Form F625-001-000) and have it notarized
To notarize means to have a Notary Public officially certify or verify a document by witnessing the signing of the document and affixing their official seal or stamp. A Notary Public is a public officer appointed by a government authority (usually a state government in the United States) to serve as an impartial witness in various legal matters.
When a document is notarized, the Notary Public confirms the identity of the person signing the document and ensures that they are doing so willingly and knowingly. The Notary Public then applies their official seal or stamp to the document, indicating that the necessary verification has taken place. This process adds a layer of authentication and credibility to the document. Here is a list of places that usually offer notary services:
- Government Offices
- Real Estate Offices
- Shipping and Postal Services
- Banks and Credit Unions
- $30,000 Bond for a General Contractor*
- $15,000 Bond for a Specialty Contractor*
- $4,000 Bond for Electrical Contractor
- Get General Liability Insurance Coverage
- Electrical Contractors are not required to submit Proof of General Liability, but it is recommended they obtain the coverage. Other Contractors are mandated to submit proof of General Liability coverage to register with L&I.
- Many projects require proof of insurance in order to start work or bid on jobs
*Contractor bonds are increasing to these posted amounts effective July 1st, 2024. Click here to learn about the new changes and how they will impact you.
7. Pay the Registration Fee
Contractor licensing fees can vary based off of the type of license you are applying for. Generally speaking, you can expect to pay between $100-$300.
8. Submit your Application and Required Docs to L&I
Note: It is recommended to physically submit your documents at your local L&I Office. If you are submitting by mail the address is as follows:
Department of Labor & Industries
Contractor Registration Section
PO Box 44450
Olympia WA 98504-4450
Navigating the process of becoming a registered contractor may seem overwhelming, but it’s a relatively straightforward process. If you find yourself in need of assistance, we’re here to help guide you every step of the way. At Narrows Insurance, we proudly represent some of the industry’s top construction insurance companies, and we’re well-equipped to assist you in launching your business. Let us simplify the insurance process and provide the coverage your construction business needs to thrive.