Frequently Asked Questions

General & Mechanical Contractors - 05/19/2023 STATUTORY CHANGES:

Did the dollar limitation requiring a commercial license change?

Yes. The licensing requirement was amended to increase the total cost of construction requiring licensure from $5,000 to greater than $10,000 for both general and mechanical contracting.

Did Project Limitations and Net Worth requirements change? Did the Surety Bond Limitations change? Is Working Capital now an added option?

Yes. The project bid, job limitations, and net worth requirements applicable to each licensing group were increased. The increased project costs limitations are currently in effect. Licensees will be required to meet the increased net worth requirements or the new working capital requirements at the time of initial licensure or during renewal in order to remain in their current licensing groups. Working capital means the capital of a business calculated as the current assets minus the current liabilities. Net worth means the total wealth of a company taking account of all financial assets and liabilities. Applicants or licensees are not required to meet both the working capital and net worth requirements, but must meet one option to qualify for the requested group limit. Additionally, the surety bond limits were reduced from two times the net worth for the applicant's license group to now require a bond in the same amount as the net worth for the applicant's license group.

Group Bid and Job
$ Limitation
Net Worth/
Total Equity2
Surety Bond
Group #1 $100,000 $10,000 $20,000 $20,000
Group #2 $400,000 $40,000 $60,000 $60,000
Group #3 $1,000,000 $100,000 $150,000 $150,000
Group #4 $3,000,000 $175,000 $250,000 $250,000
Group #5 $Unlimited $250,000 $350,000 $350,000

Group Bid and Job
$ Limitation
Net Worth/
Total Equity2
Surety Bond
Group #1 $35,000 $3,500 $7,000 $7,000
Group #2 $100,000 $10,000 $15,000 $15,000
Group #3 $200,000 $20,000 $30,000 $30,000
Group #4 $400,000 $40,000 $60,000 $60,000
Group #5 $Unlimited $200,000 $300,000 $300,000

1 Current assets minus current liabilities. S.C. Code Ann. § 40-11-20(28).
2 The total wealth of a company taking account of all financial assets and liabilities. S.C. Code Ann. § 40-11-20(18).

Is a license now required for residential Swimming Pools?

Yes. The construction, service, and repair of residential swimming pools has been added to the General Contractors-Specialty Swimming Pools classification. A General Contractor license with the Swimming Pools classification or a Residential Builder license from the S.C. Residential Builders Commission is now required to construct, service, or repair any residential pool when the total cost of construction meets the statutory cost threshold for licensure, $10,000.

Did any of the Contractor classifications or subclassifications change?

Yes, a complete breakdown of the changes can be found here.

General & Mechanical Contractor Questions - INITIAL APPLICATIONS:

Can I submit a reviewed financial statement in lieu of an audited financial statement to receive a Group 5 unlimited status?

No. An audited financial statement is required for all applicants and current licensees to initially receive a Group 5 unlimited status.

What is the difference between Net Worth and Working Capital?

Net worth means the total wealth of a company taking account of all financial assets and liabilities. Working capital means the capital of a business calculated as the current assets minus the current liabilities.

Do I need to submit the cover letter from the CPA who prepared my financial statement with my license application?

Yes. Submit the accountants' report with all compiled, reviewed and audited financial statements. The cover letter must have a letterhead, date, and signature.

Whose net worth should be reflected on the financial statement? The Company or Individual?

The financial statement should be in the name of the applicant, which is the name in which you will conduct your business (i.e., sign contracts, advertise, etc.). If you apply as a corporation, LLC, LLP, etc., the financial statement must be in that entity's name.

Can I use the financial statement of the parent company?

Yes. Your company's subsidiary name must be found in the financial statement "Notes", or you must submit a letter from the parent company stating that your entity is a wholly owned subsidiary.

Can I submit a surety bond instead of a financial statement?

Yes. In lieu of providing a financial statement showing a minimum net worth for a license group as required by Section 40-11-260, an applicant may provide a surety bond from a surety authorized to transact surety business in this State in an amount equal to the required net worth for the applicant's license group with his initial or renewal application. The required bond amounts are in parenthesis:

Group 1 General Contractor ($20,000) Group 1 Mechanical Contractor ($7,000)
Group 2 General Contractor ($60,000) Group 2 Mechanical Contractor ($15,000)
Group 3 General Contractor ($150,000) Group 3 Mechanical Contractor ($30,000)
Group 4 General Contractor ($250,000) Group 4 Mechanical Contractor ($60,000)
Group 5 General Contractor ($350,000) Group 5 Mechanical Contractor ($300,000)

(B) The above surety bond must: (1) be continuous in form and must be maintained in effect for as long as the applicant maintains the license issued by the department or until the applicant submits a financial statement showing that he meets the net worth requirements for his license group as provided in Section 40-11-260; (2) list the State of South Carolina as oblige for the bond; (3) be for the benefit of any person who is damaged by an act or omission of the applicant constituting a breach of construction contract or a contract for the furnishing of labor, materials, or professional services for construction undertaken by the applicant, or by any unlawful act or omission of the applicant in performing construction; and (4) be in addition to, and not in lieu of, any other surety bond required of the applicant by law or regulation, or by any party to a contract with the applicant. (5) provide for bond cancellation by the Surety Company only by notification to the board and the applicant thirty days prior to cancellation.

I am applying for a license through reciprocity with a state that licenses the individuals, not the entities. What DBA name should I list on the application?

The name in which you wish to conduct business, advertise, pull permits, etc. in this state, South Carolina.

I was issued a license under the Group 1 Grandfather Clause. What do I need to do to upgrade my license?

You must first pass any necessary technical exam(s) and then submit a PQP/QP Revision Application, Doc. 181.

General & Mechanical Contractor Questions - RENEWALS:

Who is the primary qualifying party (PQP)?

The PQP is the qualifying party who has been designated by the applicant as the principal individual responsible for directing or reviewing work performed by the applicant in a particular classification or subclassification. Additional qualifying parties are those individuals who have passed all the necessary exams to qualify the applicant for licensure but have not been designated as the primary qualifying party.

My license was issued or upgraded recently, do I still need to submit a financial statement?

Yes. You must submit an acceptable financial statement at each renewal.

Will you accept a compiled financial statement instead of a reviewed financial statement to renew a Group 5 license?

No. The law specifically states a reviewed financial statement prepared by a licensed CPA in required or a Surety Bond for a Group 5 license. No exceptions can be made.

I have a Group 5 license. What if I do not want to submit a reviewed financial statement or I do not meet the required net worth or working capital for a Group 5 license?

You may submit the Owner-Prepared Financial Statement, Doc. 172, and write on the renewal form that you are requesting to downgrade to a lower group limit.

If I move my license to a lower group limit, what is required to upgrade back?

To upgrade your license to a higher group, you must submit the Revision Application, Doc. 180, along with an appropriate financial statement or surety bond.

Can documents/applications be notarized by an out-of-state notary?

Yes. Any licensed or certified notary may notarized documents.

If my CPA prepared my financial statement, does it have to be signed and notarized?

No. However, you must include the cover sheet from the CPA.

Who do I make my check payable to?

S.C. Contractor's Licensing Board.

General & Mechanical Contractor Questions - COMPLIANCE ISSUES:

How do I obtain an initial complaint form?

You may file a complaint directly online or submit the Contractor's Complaint Form by mail to: SCLLR-Office of Investigations and Enforcement, PO Box 11329, Columbia, SC 29211. The complaint will be reviewed in order to determine if this complaint falls within the scope of the statutory authority of the Board. Once your complaint has been processed, you will be notified of its status. Questions about complaints should be directed to the LLR Office of Investigations and Enforcement at (803) 896-4470.

Did the Contractor's Board adopt the South Carolina Residential Construction Standards?

Yes. The South Carolina Residential Construction Standards are guidelines used by the Board in analyzing complaints that may involve substandard work and construction standards violations. The standards were first adopted in 2015 and recently readopted by the Board on October 13, 2022.