If you are performing new commercial or residential construction projects in Mississippi that exceed $50,000, state law requires you to have a contractor license. To begin planning to apply for a Mississippi contractors license, you should become familiar with the testing and application process. Becoming knowledgeable in the application process and getting familiar with the Mississippi State Board of Contractors is helpful. The Board offers great information that can give you the preparation you need for the application. Be sure that you know and understand the requirements before you start studying for the exams that you will be taking. This will make the application process much less stressful and allow you to focus on studying.
Mississippi Contractor License Application Checklist
The Mississippi Building License allows you to bid, build, and improve commercial or residential project. You will complete the Commercial Application to obtain this license. The below list outlines a checklist that we have put together to help you prepare for your contractor’s license in Mississippi:
- Take a NASCLA Exam study course
- Pass the NASCLA Exam – submit NASCLA Exam transcript with application
- Get approved for and pass the Business and Law Exam – Submit pass notification with MS contractor license application
- Form your entity that you will be performing work under – register with the Mississippi Secretary of State
- Furnish a sales tax number or Mississippi use tax number
- Furnish a Tax I.D number or a federal income Tax I.D number
- Provide certificate of general liability insurance
- Provide certificate of insurance coverage showing current workers’ compensation coverage if you have 5 or more employees
- Provide three letters of reference – one must be from the bank
- Show experience in the building contractor classification
- Provide proof of employment of the qualifying party
- Provide a reviewed or audited financial statement
- Minimum net worth of $50,000
- Pay a $400 application fee
- Complete and notarize the Affidavit on the Mississippi Contractor License Application
The NASCLA Exam
The NASCLA exam is a 23 book, open book exam. You have 5 ½ hours to complete the exam. There are 125 questions on this exam, however only 115 questions count. The remaining 10 questions are potential future test questions. This means that you must get 81 of the 115 counted questions correct to pass with a score of 70%. The exam is open book, so being able to navigate the books is the most important piece to this exam. Having a quality study course is important, as studying 23 books on your own will not be efficient. Tabbing and highlighting are allowed and will tremendously help you navigate the books.
In Mississippi, the NASCLA exam will serve as the trades exam to become a commercial and residential licensed general contractor. We recommend the NASCLA/Commercial Building Contractor’s license due to the freedom that allows you to perform multiple sectors of contracting. Also, the NASCLA exam is a more universal exam to allow contractors to have a license in multiple states. Currently, 16 different states and the U.S. Virgin Island accept the NASCLA exam as the trades exam. If you are planning to become licensed in Mississippi, NASCLA is a great testing option. You must apply for the NASCLA exam, which takes about 7 business days to return. Once receiving your application back, you can schedule your exam through PSI Exams.
The Mississippi Business and Law Exam
There are 50 questions on the Mississippi Business and Law Exam. You must answer 35 of the 50 questions correct to receive a passing grade of 70%. The exam is 120 minutes long. The book used for this exam is NASCLA Contractors Guide to Business, Law and Project Management – Mississippi Residential & Commercial Contractors, 3rd Edition.
The Mississippi Business and Law Exam is scheduled through PSI Exams. We do not offer a course for this exam. There are a few reasons for this. One being that it is a single book, open book exam. Also, the NASCLA exam includes a business and law book within the 23 books that you are tested on. Much of the information is from that same book! The specific Mississippi rules and regulations should be your main focus on this exam as you will probably already have the other information memorized from your NASCLA exam studying. Many other course providers will try to sell you on a Business and Law study package. We have confidence that you can study this one book on your own to pass this exam. Once passing this exam you are on your way to obtaining a Mississippi contractor’s license.
Form Your Entity
It is important to create the entity that you want to be licensed under BEFORE completing your license application. If you completed the application as yourself, but then want to perform work under an LLC you will not be able to do so. The reason is that YOU would have a Mississippi contractor license, not your LLC.
Some may be confused as to what the difference is between a license holder and the qualifying party. The license holder is the entity that holds the license. So, if you are going to perform work under an LLC or corporation, that would be the Mississippi contractor’s license holder. The qualifying party is the individual that takes and passes the required exams. In the case that you form an LLC and pass the necessary exams, you would be the qualifying party and your LLC would be the license holder.
Insurance Requirement
The Mississippi contractor license applicant must provide a certificate of general liability insurance that shows a current minimum coverage of three-hundred thousand dollars ($300,000) per occurrence. It must also show six-hundred thousand dollars ($600,000) aggregate. The certificate should indicate Mississippi State Board of Contractors to be notified in the event of cancellation of coverage by listing MSBOC as certificate holder. Your license name will need to match the name in which the Board will issue the license to.
In the case that you have five (5) or more employees, it is a requirement to have workers compensation coverage in Mississippi.
Letters of Reference
You will need to include three (3) letters of reference on your Mississippi contractor’s license application. One (1) of these letters must be from the bank or financial institution. The other two (2) reference letters can be from anyone you have worked with or for on construction related projects.
The banking reference letter should have confirmation that you are indeed banking with that institution and maybe a statement or two stating what your business does. The other two (2) reference letters should include some information about work you have performed together in the past and some talking points about you and your business. The Mississippi contractor license application has good sample letters to refer to for your references to review before writing the letters for your application.
Mississippi Contractor License Experience
The Mississippi contractor license application notes to list at least three (3) jobs completed in the requested classification. You should list three (3) general contracting jobs completed if you are requesting a Building License classification in Mississippi. Also, list incomplete projects that are currently ongoing.
Financial Requirements
You must provide a financial statement reviewed or audited by a certified public accountant on your Mississippi contractor license. This review must be done within the last twelve (12) months to filling out the application. Applicants must demonstrate a minimum net worth of Fifty-Thousand Dollars ($50,000) for a Building Construction license in Mississippi.
Mississippi Contractor’s License Conclusion
Getting a general contractor license in Mississippi requires a significant investment of time and effort. However, it is well worth it for those who want to establish a successful career as a general contractor. By following these steps, you can start your journey to obtain a license and start working as a licensed contractor in Mississippi. Having a Mississippi contractor license is required when performing work of the value of $50,000. Also, it is great for building your resume and gaining the trust of potential clients. Good luck!