If you’re considering starting a contracting business in New Jersey, it’s important to first understand all of the different complexities that are involved.
These largely stem from the fact that New Jersey does not have a uniform state-level license that’s applicable to all — or most types — of contractors.
With that in mind, our New Jersey Contractor License guide breaks down everything you will need to know to meet all necessary regulations and get your business off the ground successfully.
Tip: If you’re planning to work as a general contractor in New Jersey, we recommend forming an LLC. This is an affordable business structure that protects your personal assets against debt and/or lawsuits.
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In New Jersey, licensing requirements for contractors vary depending on the specific trade in question, as well as on the exact location within the state — there isn’t a “general contractor” license.
We’ve explored these considerations in greater detail below.
Contractors in New Jersey aren’t required to obtain a license at a statewide level unless they are engaging in the business of making or selling home improvements, a requirement that is outlined in more detail in the next section.
Because local regions within the state often set their own rules, however, you’ll likely need to obtain at least one type of license.
In Newark, for example, general contractors will have to secure a building contractor license from the city.
This application comes at a cost of $200 and requires a New Jersey Business Registration Certificate, a Police Warrant Record Check, and a State Bureau of Investigation Report.
In New Jersey, all home improvement contractors that are undertaking projects that exceed $500 in value are required to be licensed with the New Jersey Division of Consumer Affairs.
This requirement is set forth by the Contractors’ Registration Act, which governs the sale and execution of home improvement work in New Jersey.
Under this law, home improvement encompasses any activity that remodels, alters, paints, repairs, renovates, restores, moves, demolishes, or modernizes a residential structure — as well as any part of the property it sits on.
To become registered, you will need to:
Keep in mind that you will need to renew your initial registration before March 31 of each year.
How you can go about becoming a general contractor in New Jersey will depend on your location and scope of work.
Having said that, below we’ve included a general overview of the licensing process (where applicable).
Before starting the application process for a contractor license, you’ll first need to decide on the structure of your business. Since this decision will impact your liability, tax obligations, and how you run your business, it’s vital you’re informed about the details of each structure so that you can effectively determine which one is best suited to your needs.
Many contracting businesses in New Jersey, particularly smaller ones, decide to structure themselves as an LLC because it grants them tax flexibility, limited liability protection, and credibility in the eyes of their clients.
More than 72% of our readers form their LLC using a professional filing service. Our recommended service provider is:
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After forming your business, you’ll need to confirm that you meet the minimum basic requirements. While the specifics of these requirements will vary depending on the license you are trying to obtain, you’ll generally need to:
Once you’ve confirmed that you meet the basic requirements of the license your business needs, the next step is to complete and submit the appropriate application form to the appropriate regulatory body, along with any associated fees.
We’ve explored this process for the specialist trades in New Jersey that require licensing:
While not a universal requirement, many contractor licenses in New Jersey require applicants to pass a licensing exam in order to qualify.
Candidates often struggle with these exams as they test both their knowledge of the trade and their understanding of New Jersey’s specific regulations and laws.
To avoid this, we recommend our readers take advantage of online study guides and preparatory courses in order to get ready for these exams and ensure they pass on their first attempt.
In order to protect both your business and the client in case of accidents and damages, most contractors in New Jersey will need to provide proof of insurance coverage in order to get licensed.
For instance, home improvement contractors are required to maintain a commercial general liability insurance policy with a minimum coverage of $500,000 per occurrence, as well as workers’ compensation insurance if they employ workers.
Be sure to check the specific insurance prerequisites for the license you’re seeking as well as the surety bond requirements of your local municipality, as these requirements can be unique to each trade and city.
Once you obtain your license, it’s essential to keep it active. This often involves renewing it every few years, paying associated renewal fees, and meeting continuing education requirements.
For example, plumbers in New Jersey will need to renew their Master Plumber licenses biennially by June 30th of odd-numbered years, with a reminder sent to their recorded address approximately 60 days before the expiration date.
After successfully obtaining the professional license needed to work as a contractor in New Jersey, it’s important to understand that there may be additional licensing requirements your business will need to satisfy in order to operate legally.
Below, we’ve explored the various additional licenses and permits that your New Jersey contractor business may need in more detail.
While general contractor licenses aren’t required at a state level in New Jersey, there are certain state business licenses you may need to obtain before you can get up and running.
Because the building materials and services a general contractor provides to their clients as part of a construction project are generally taxable, for example, you’ll likely be required to get a sales tax identification number and file to pay sales and use tax to the New Jersey Division of Revenue and Enterprise Services.
Additionally, your general contractor business may require a health permit from the New Jersey Department of Health (NJDOH) if it takes on certain types of projects with the potential to impact the safety or well-being of the public.
Note: To better understand your general contractor business’s licensing requirements, check out our in-depth New Jersey Business License guide.
Many local municipalities often impose their own additional requirements that you may be required to satisfy for your business to operate legally in that area.
For example, in Hoboken, contractors will be required to obtain a permit from the city for any construction-related activities, which comes at a cost of $75.
Note: To stay informed about and comply with local regulations, it’s important to understand the specific requirements that apply in your municipality.
You can locate your municipality and access all of the applicable regulatory information by visiting the New Jersey State League of Municipalities website.
To obtain a contractor’s license in New Jersey, you will first need to identify the license required for your trade (e.g., home repair contractors, electricians, etc).
Home improvement contractors, for example, are regulated at the state level and must register with the New Jersey Division of Consumer Affairs.
Other trades, such as electricians, are governed by specific boards (i.e., the Board of Examiners of Electrical Contractors.).
In New Jersey, handymen performing basic repairs and maintenance that are evaluated at under $500 typically do not need a state contractor license.
Having said that, for more extensive home improvement projects exceeding this amount, you will be required to register with the New Jersey Division of Consumer Affairs as a home improvement contractor.
Keep in mind that you’ll likely also need additional licenses at a state and/or local level (e.g., sales tax, etc.).
Contractors in New Jersey are regulated by the New Jersey Division of Consumer Affairs for home improvement work.
Specific trades, such as electricians, plumbers, and HVAC specialists, are regulated by their respective State Boards (e.g Board of Examiners of Electrical Contractors, etc).
For more information, including how to become a licensed home repair contractor, you can take a look at our in-depth New Jersey Contractor License guide.
The cost to acquire a contractor’s license in New Jersey varies based on your specific field and the license sought.
For instance, for a home improvement contractor registration, applicants will be required to pay a $110 application fee.
For specialties like obtaining a home repair contractor license or engaging in wall to wall carpeting services, the fees and requirements will differ.
In New Jersey, selling financed home repair contracts requires a specific license. Specifically, individuals or entities engaging in the negotiation or sale of these contracts are required to obtain a home repair salesperson license.
Interested in finding out more? Check out our How to Get a General Contractor License guide.
Information on this page was researched and gathered from a multitude of sources and was most recently updated on September 11, 2024
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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