Contractor License Center provides contractor test preparation, company setup, license application filing and business services for construction contractors in the State of Arizona.

Frequently Asked Questions about Contractor's License Bonds

In order to obtain a license, the Arizona Registrar of Contractors (AZROC) requires that contractors file for a surety bond in the form a license bond in the amount requires by the license classification and the anticipated annual gross volume for the business. This bond assures clients that the contractor will perform the work, pay all subcontractors and laborers, and comply with all building codes set forth by the state. If you’re preparing to take your contractor licensing test, these FAQs about license bonds will help you get your business up and running as soon as you pass the exam.

Where Can I Obtain a Bond?

Surety bonds may be obtained from any insurance company which is authorized by the Arizona Department of Insurance to issue contractor’s license bonds in Arizona. Bonds may also be provided in the form of cash or a certificate of deposit from any bank which operates in the state.

What are My Bond Limits?

License bonds are established based upon the expected gross volume of work for the ensuing fiscal year. Residential general contractors require a $9,000 bond for gross volume less than $750,000 and a $15,000 bond for gross volume in excess of $750,000. The highest bond amount is $100,000 for commercial general contractors with an expected gross volume in excess of $10 million. A full list of bond limits and regulations is available on the AZROC website.

How Long is a Bond Valid?

Surety bonds must be continuous, which means there is no termination date on the bond. You may be required to pay premiums to the insurance company to keep the bond in force. If your bond is in cash, the bond will be retained until two years after the license terminates, at which point you may apply to have the bond released to you if no claims are made against the bond in that time.

Arizona Contractor License Center can guide you through every step of becoming a licensed contractor. In addition to our licensing classes and test preparation services, we also provide bonding assistance to help contractors secure the proper bonds. Call us today at (888) 414-1925 to learn more about our services.

Setting Up a Contracting Business in Arizona

If you’ve always wanted to be your own boss, consider setting up your very own contracting business. As a business owner, you will be able to pick and choose the jobs that put your skills to good use and provide the most take home pay. Here is a look at some of the most important steps of establishing your legal entity and getting your contracting business off the ground.

Obtain Your Contractor’s License

The first step is to obtain your Arizona contractor’s license. Arizona Contractor License Center has all the tools and resources you’ll need to pass the licensing exam. AZCL will even help you file your license application after passing the exam.

Choose a Company Name and Entity Type

Once you obtain your contractor’s license, you will need to choose a company name and entity type. AZCL can help you research and reserve your company name with the required state agencies and choose the right type of business entity (sole proprietorship, partnership, limited partnership, LLC, etc.)

Secure Bonding Coverage

In order to complete your contractor application, you will need to obtain a surety bond, which is a special type of agreement that is designed to protect both you and the client. Bond limits vary depending on the type of contracting work you plan on completing and your estimated gross annual volume.

Arizona Contractor License Center can assist you in obtaining your contractor’s license and setting up your company. Our goal is to prepare you for the contractor licensing exam and move you through the entity setup process in a timely manner so you can start earning a living as quickly as possible. You can even name ACLC as your statutory agent if you will be filing as an LLC. Call us today at (888) 414-1925 to learn more about our contractor licensing classes and company setup services.

How a Contractor License Center Can Help You Prepare for Your Exam

At the Arizona Contractor License Center, we help new contractors prepare for the state's licensing exam with a program that covers the testing materials in depth. Our licensing experts will help you decide which type of state contractor license will best suit your needs, so that you can meet the requisites of the license in advance of the exam. As part of the preparation, contractors are shown a video that covers all topics of the Business Management Test. The video is shown several times daily at each of our seminar centers. Topics covered in the preparation program include bonds, contracts, inventory control, liens, and entity types.

Before you take the contractor licensing exam, study the materials and watch the video at the Arizona Contractor License Center. We help people gain the skills and knowledge necessary for passing the state's licensing exam, and you can learn more about our program by calling our Phoenix location at (888) 738-3175.

What Is the Role of a Statutory Agent?

In Arizona, corporations and LLCs are required to declare a statutory agent. A statutory agent is someone that represents your business who resides in the state of Arizona. This agent can file your annual corporate reports and receive state correspondences, court summons, forwarded mail, and legal notices. If your corporate address changes, the statutory agent will notify all the interested parties. Without a statutory agent, you could lose your business entity and contractor license. The role of a statutory agent is further explained in the video.

As your statutory agent, Arizona Contractor License Center will work on behalf of your company. Additionally, we will answer any questions you might have about conducting corporate business in the state. To find out more about our services, call our Phoenix office at (888) 738-3175.

Exploring the Requirements for Contractor Bonds

Contractors are required by law to file bonds and recovery funds. The amount that you would file for a contractor bond—either surety or cash—would depend on the type of license and your projected yearly gross.

Contractor Bond Licensing Requirements

Regardless of the license classification, a new applicant must determine his or her expected in-state productivity volume within the fiscal year at hand. When renewing a license, volume estimates must be done on a form suited for the state's Registrar of Contractors, which won't be held liable for inaccurate work-volume estimates entered on to said form.

Licensed Contractor Bond Amounts

If a licensee deliberately underestimates his or her projected gross, it could be interpreted as material falsification and therefore grounds for suspension or termination of license. A licensee can have the amount of a bond raised at any time, but it cannot be lowered until renewal time at the close of the fiscal year. Bonds are not effective until the listed date, which could be specified as either on or after the date of filing with the Registrar's office.

Ways to Get Contractor Bonds

In Arizona, you can get a surety bond from any insurance company that has been authorized to issue contractor bonds by the Department of Insurance. A bond can also be produced with cash or a bank certificate. For a certificate of deposit, you can get a cash-alternative form by contacting any office of the Arizona Registrar of Contractors.

Termination or Cancellation of Bonds

A surety bond has no termination date, but you could be bound to periodical insurance premiums to keep the bond effective. The issuing company may cancel a bond, but not without sending a 30-day notice to you and the registrar's office.

At Arizona Contractor License Center, we provide state bonding services to local contractors. We also offer study programs where contractors can gain the knowledge and skills necessary to pass the state's contractor licensing test. To learn more about our services, call our Phoenix office at (888) 738-3175.

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