How to Become a General Contractor in North Carolina

1. Introduction

For ambitious construction professionals in North Carolina, the path to leading, building, and managing significant projects is governed by one foundational credential: the North Carolina general contractor license. As the state's construction industry continues to expand, obtaining this license is the essential step that separates a tradesperson from a licensed general contractor, unlocking the ability to manage larger, more complex, and more profitable projects.

In North Carolina, a licensed general contractor is more than a manager; they are a public steward. The state's licensing body, the North Carolina Licensing Board for General Contractors (NCLBGC), was established with the specific purpose "to safeguard the life, health and property of the people of North Carolina". Earning this license is a mark of professional commitment to that public welfare, demonstrating your competence, financial stability, and knowledge of the law.  

This guide is a comprehensive, step-by-step roadmap to navigating the North Carolina general contractor license requirements. Unlike other articles, this report is built exclusively on official data from the NCLBGC , the North Carolina General Statutes (NCLEG) , and the North Carolina Administrative Code (NCAC). In the following sections, you will learn the exact legal requirements, the different license types, the financial hurdles, the exam process, and the mandates for renewal.  

2. Understanding the General Contractor License in North Carolina: Why You Need It

The $40,000 Rule: The Legal Licensing Threshold

The primary question for any aspiring contractor is, "When do I need a license?" In North Carolina, the law is exceptionally clear and provides a specific dollar amount.

According to North Carolina General Statute (G.S.) 87-1, a general contractor license is legally required for any "person or firm or corporation" who undertakes to "bid upon or to construct or who undertakes to superintend or manage... the construction of any building, highway, public utilities, grading or any improvement or structure where the cost of the undertaking is forty thousand dollars ($40,000) or more".  

The specific wording of the statute is critical. The law includes the phrases "bid upon" and "superintend or manage". This means a license is required before you even submit a bid on a project of $40,000 or more. You are in violation of the law by simply offering to perform the work, regardless of whether you are awarded the contract. Furthermore, the "cost of the undertaking" refers to the total project cost, not just the portion of work you are performing.  

Risks of Operating Without a License in North Carolina

Operating as an unlicensed contractor in North Carolina is a costly and career-ending risk. The NCLBGC has a full-time investigative staff and actively pursues unlicensed operators through compliance checks and sting operations.  

The penalties are severe and fall into three categories:

1. Criminal Penalties: Contracting without a license in violation of G.S. 87-1 is a Class 2 misdemeanor. This can result in fines and, for repeat offenders, potential jail time.  
2. Administrative Penalties: The NCLBGC has the authority to go to Superior Court and obtain a civil injunction to immediately and forcibly stop your operations. The Board is also entitled to recover its administrative costs and attorney's fees from you for the investigation and prosecution.  
3. Civil & Financial Penalties: This is the most devastating risk. As an unlicensed contractor, any contract you sign for a project valued at $40,000 or more is considered void and unenforceable. This means you have no legal ability to file a mechanic's lien or sue a client for non-payment. If a client refuses to pay you for work completed, you have zero legal recourse to recover your labor and material costs.

License Exemptions

The exemptions to the $40,000 rule are very narrow and specific, as defined in G.S. 87-1(b) :  

• The Owner-Occupant Exemption: This is the most common exemption. A property owner is permitted to build or alter their own home without a license, if they intend to "solely occupy" the building (with their family) for at least 12 months following its completion. This exemption is frequently abused, and the law was strengthened to ensure the property owner is personally managing the project and not simply pulling a permit for an unlicensed builder.  
• The Farming Exemption: An individual may construct or alter a building on their own land, provided that land is "used in the business of farming" and the building is intended for their own use upon completion.  
• Subcontractors: Licensed subcontractors, such as plumbers, HVAC technicians, or electricians, do not need a separate general contractor license to perform their specific trade when they are working under a licensed general contractor.  

3. Types of General Contractor Licenses in North Carolina

North Carolina's licensing system is a two-part matrix. To get a license, an applicant must choose one "Limitation" (which defines the financial value of projects you can undertake) and one "Classification" (which defines the type of work you are permitted to do).

Your license will be a combination of these two, such as a "Limited Building Contractor" or an "Unlimited Residential Contractor."

Part A: The Three License Limitations (Financial Tiers)

These limitations, set by G.S. 87-10, define the maximum value of any single project you can manage. It is important to note that many third-party websites list outdated financial caps ($500,000 and $1,000,000). The current, official values per North Carolina law are as follows:  

1. Limited License: Allows the holder to act as a general contractor for any single project with a value of up to $750,000.  
2. Intermediate License: Allows the holder to act as a general contractor for any single project with a value of up to $1,500,000.  
3. Unlimited License: Allows the holder to act as a general contractor for projects of any value, with no financial limit.  

Part B: The Five License Classifications (Scope of Work)

This classification defines the type of construction you are legally allowed to perform.  

1. Building Contractor: This is the most comprehensive and common classification. It covers all building construction, including commercial, industrial, institutional, and all residential building construction.  
2. Residential Contractor: This is a more restricted license that covers only construction and demolition activity related to residential units that must conform to the North Carolina Residential Building Code. Because the "Building Contractor" classification fully includes the "Residential" scope, it is often the recommended path for those who may ever want to take on a small commercial project, such as a retail up-fit or an office renovation.  
3. Highway Contractor: This classification covers projects related to roads, bridges, and highways.  
4. Public Utilities (PU) Contractor: This classification covers work on public utility systems. It is further broken down into sub-classifications such as PU(Water Lines), PU(Sewer Lines), and PU(Fuel Distribution).  
5. Specialty (S) Contractor: This is a broad category for numerous specialized trades that fall under the general contracting laws when the project cost is $40,000 or more. The NCLBGC portal lists many sub-classifications , including:  
   • S(Asbestos)
   • S(Boring & Tunneling)
   • S(Concrete Construction)
   • S(Marine Construction)
   • S(Masonry Construction)
   • S(Roofing)
   • S(Swimming Pools)

4. Step-by-Step Guide: How to Get Your North Carolina General Contractor License

Step 1: Meet the Basic Eligibility Requirements

The baseline requirements for an applicant are set by G.S. 87-10. The applicant must:  

• Be at least 18 years of age.  
• Possess "good moral character" as determined by the Board.  
• Consent to a criminal background check.  

A comprehensive review of the official North Carolina General Statutes  and the NCLBGC's administrative rules  reveals a critical fact: North Carolina does not have a minimum years-of-experience requirement to sit for the exam.  

This is a significant departure from many other states. North Carolina's system places the entire burden of proving competency on two other pillars: 1) successfully passing the required technical examinations, and 2) proving your financial responsibility. This makes the state highly accessible to knowledgeable entrepreneurs who may not have a multi-year formal apprenticeship.

Step 2: Register Your Business

The NCLBGC issues licenses to legal entities (sole proprietorships, partnerships, LLCs, or corporations), not just individuals. Before applying for your license, you must first establish your business as a legal entity.  

1. Register with the NC Secretary of State (SOSNC): You must form a legal entity, such as an LLC or Corporation, by filing with the North Carolina Secretary of State. This process typically involves:  
   • Verifying that your desired business name is available.  
   • Filing "Articles of Organization" for an LLC or "Articles of Incorporation" for a corporation. The current filing fee for a North Carolina LLC is $125.  
   • Appointing a Registered Agent who resides in North Carolina.  
2. Register with the NC Department of Revenue (NCDOR): You must also register your new business with the NCDOR to obtain an account ID for state tax withholding and other applicable taxes.  
3. Obtain a Federal EIN: You will need to apply for a Federal Employer Identification Number (EIN) from the IRS for your new business entity.  

Step 3: Complete the License Application & Prove Financial Responsibility

This is the most detailed part of the process and is handled entirely through the NCLBGC.

First, you must complete the application for a new license. All applications must be submitted online through the NCLBGC's official web portal. The Board does not accept paper applications.  

At the time of application, you will pay a non-refundable application fee, which is set by G.S. 87-10 :  

• Limited License: $75    
• Intermediate License: $100    
• Unlimited License: $125    

Second, you must provide proof of financial responsibility. This is the primary hurdle for most applicants. Per 21 NCAC 12A.0204, you must prove that your business entity meets the minimum financial requirements for your chosen limitation :  

• For a Limited License: You must demonstrate $17,000 in working capital (current assets minus current liabilities) OR a total net worth of $80,000.  
• For an Intermediate License: You must demonstrate $75,000 in working capital.  
• For an Unlimited License: You must demonstrate $150,000 in working capital.  

This financial proof must be submitted in the form of an audited financial statement or an "agreed-upon procedures report" prepared by a Certified Public Accountant (CPA).  

Step 4: Pass the Required Examinations

Once the NCLBGC reviews and approves your application (including your financial documentation), they will send you an eligibility letter. You will then use this letter to schedule your examinations directly with the official state-contracted exam provider, PSI Services LLC.  

To become licensed, all classifications require passing two separate exams:

1. The North Carolina Business and Law Exam: This exam tests your knowledge of state-specific business practices, regulations, and lien laws.  
2. A Trade-Specific Exam: This exam tests your technical knowledge for the classification you are seeking (e.g., North Carolina Building Contractor, North Carolina Residential Contractor).  

The NASCLA Option (A Pro-Tip): North Carolina offers a significant alternative for the trade exam. The NCLBGC accepts the NASCLA Accredited Examination for Commercial General Building Contractors.  

If you pass the NASCLA exam, it satisfies the North Carolina Building trade exam requirement. You would still need to pass the separate North Carolina Business and Law exam. This is the preferred path for any contractor with multi-state ambitions, as the NASCLA exam is accepted for trade licensure by 15+ other state licensing boards.  

All exams are open-book. However, this does not make them easy. You must bring the exact list of approved reference books, which is extensive and costly. Key reference books include the NASCLA Contractor's Guide to Business, Law, & Project Management - North Carolina Edition , the 2018 North Carolina State Building Code , and the OSHA 29 CFR 1926 Standards for the Construction Industry.  

Step 5: Obtain Insurance and Bonding

This final step is often misunderstood, as it involves an optional bond for licensing and mandatory insurance for operating.

Surety Bond (An Alternative to Financials): If your business cannot meet the working capital or net worth requirements ($17,000, $75,000, or $150,000) detailed in Step 3, North Carolina law allows you to secure a surety bond in lieu of that financial proof. This is the primary mechanism for a new startup to obtain a license without having extensive cash on hand.  

You must obtain a bond for the following amount, based on your desired limitation:

• Limited License: $175,000 bond    
• Intermediate License: $500,000 bond    
• Unlimited License: $1,000,000 bond    

Note: You do not pay the full bond amount. You pay an annual premium, typically 1-5% of the total amount, to a surety company.

Workers' Compensation Insurance (Mandatory for Operating): This insurance is not required by the NCLBGC to get your license, but it is required by North Carolina state law to operate. The North Carolina Industrial Commission mandates that all businesses must carry workers' compensation insurance if they have three (3) or more employees.  

This rule has a critical nuance: for corporations (Inc.), all corporate officers (e.g., President, Vice President, Secretary) are included in the headcount. This means a three-officer corporation must carry workers' compensation, even if it has no other employees.  

General Liability Insurance (A Practical Requirement): The NCLBGC does not require you to hold general liability insurance for licensure. However, it is a practical and contractual necessity. Virtually no client will hire you without it, and many counties (like Iredell County, which requires $2,000,000 in general liability) will demand proof of it before issuing a local building permit.  

5. The Financial Breakdown: Costs and Timelines

Below is a summary of the estimated costs associated with obtaining your North Carolina general contractor license. These costs do not include optional exam preparation courses, CPA fees for your financial statement, or the annual premiums for a surety bond.

Realistic Timeline for Licensing Based on official processing times, a realistic timeline to get your license is 2 to 4 months.

• Month 1: Register your business with the SOSNC, engage a CPA to prepare your financial statement, and gather all documents. Submit your completed application and fees via the NCLBGC portal.
• Month 2: The NCLBGC application review period. This is currently averaging six weeks. During this time, you should purchase your required reference books and begin studying.  
• Month 3: Receive your exam eligibility letter from the NCLBGC. You have 120 days from the date on the letter to schedule and pass your exams with PSI.  
• Month 4: After you pass both exams, PSI will report your scores to the NCLBGC, and your license will be issued.

6. License Renewal and Continuing Education

Renewal Process

Earning your license is the first step; maintaining it is an ongoing annual requirement.

• All North Carolina general contractor licenses are renewed annually.  
• The license expires on January 1st of each year.  
• Renewal applications must be submitted online, and the annual renewal fees are the same as the initial application fees: $75 (Limited), $100 (Intermediate), and $125 (Unlimited).  
• A $10 late fee is assessed for each month your renewal is late.  

Continuing Education (CE) Requirements

Per G.S. 87-10.2, continuing education is mandatory for the renewal of Building, Residential, and Unclassified licenses.  

The requirement is 8 hours annually, broken down as follows :  

• 2-Hour Mandatory Course: A specific course produced by the NCLBGC that covers critical updates to laws and rules. The 2025 course fee for this is $75.  
• 6 Hours of Elective Courses: These courses can cover a range of topics (such as building codes, safety, or business management) and must be taken from a Board-approved provider.  

A Critical Warning: The "December CE Trap" The CE year ends on November 30th. Board rules prohibit CE providers from offering courses during the entire month of December.  

This creates a critical bottleneck. If you wait until December 1st to complete your education, you cannot. Your license will become invalid on January 1st, and you will have to wait until classes resume in January, all while paying late fees to the Board.

7. Out-of-State Contractors: Reciprocity in North Carolina

"Reciprocity" is one of the most misunderstood topics in contracting. For an out-of-state contractor, there are two potential paths to a North Carolina license.

Path 1: Direct License-for-License Reciprocity

G.S. 87-15.1 gives the NCLBGC the discretion to grant a license to a contractor licensed in another state, without a written exam, if that state's qualifications are equal to North Carolina's.  

In practice, this path is extremely narrow. While many third-party sources list numerous reciprocal states, they often confuse the General Contractor Board with the Electrical Contractor Board. The NCLBGC appears to have formal reciprocity agreements only with South Carolina and Tennessee. Furthermore, some states, like Georgia, have actively paused their reciprocity agreements with North Carolina.  

Path 2: Exam Waiver (The NASCLA Path)

This is the more common and reliable "reciprocity" path. As mentioned in Step 4, North Carolina accepts the NASCLA Accredited Building Exam.  

If you are an out-of-state contractor and you have already passed the NASCLA exam to get your home state license, you do not need to retake the North Carolina Building trade exam. You must still:

1. Submit a full application to the NCLBGC.
2. Pay all application fees.
3. Meet the same financial responsibility requirements as a new applicant.
4. Pass the North Carolina Business and Law exam.  

8. Growing Your Business with Billdr.ai

Once you have your North Carolina general contractor license, the next step is connecting with high-quality projects. Billdr.ai connects certified, professional general contractors with vetted residential renovation projects, helping you build your project pipeline and grow your business.

9. Frequently Asked Questions (FAQ)

How long does it take to get a general contractor license in North Carolina? You should plan for a 2-4 month process. This includes 1 month for business registration and application preparation, approximately 6 weeks for the NCLBGC to process your application , and 1-2 months for exam scheduling and study.  

What is the cost of a general contractor license in North Carolina? Initial, one-time costs (application, exams, business registration, and reference books) typically range from $800 to $1,500+, depending on your license limitation. This does not include the cost of a surety bond, which is a separate, ongoing annual premium.  

Can I be a general contractor in North Carolina without a license? No. It is illegal to bid on, manage, or construct any project valued at $40,000 or more. The penalties for operating without a license include a Class 2 misdemeanor , court injunctions , and the inability to file a lien or enforce your contract in court.  

Do I need experience to get a North Carolina GC license? No. This is a common misconception. The NCLBGC does not have a formal requirement for a specific number of years of field experience. You must be 18, have good moral character, prove your financial responsibility, and pass the two required exams.  

How do I perform a North Carolina general contractor license search? You can verify a contractor's license status, limitation, and classification by using the NCLBGC's official "Verify License Search" portal on their website. This is a critical step for any homeowner before hiring a contractor.  

Sources

• North Carolina Licensing Board for General Contractors (NCLBGC): https://portal.nclbgc.org/
• North Carolina General Statutes Chapter 87, Article 1 (Contractors): https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_87/Article_1.html
• North Carolina Administrative Code Title 21, Chapter 12 (General Contractors): http://reports.oah.state.nc.us/ncac/title%2021%20-%20occupational%20licensing%20boards%20and%20commissions/chapter%2012%20-%20general%20contractors/chapter%2012%20rules.pdf
• North Carolina Secretary of State (SOSNC) - Business Registration: https://www.sosnc.gov/manual/business_registration/Contents
• PSI Exams (Official Exam Provider): https://www.psiexams.com/