What's my Liability as a Licensed Contractor in Arizona?
Who is responsible for contracting activities?
All persons listed on the license are responsible for the contracting activities of the business. "Person" means:
- A Qualifying Party
- An Owner
- Any Partner of a Partnership
- All members of a limited liability company
- Any Officer, Director or owner of 25 percent or more of the stock of a corporation
Who must be licensed as a contractor?
- Any business which contracts or offers to contract to build, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, development or improvement, or to do any part of the work must be a licensed contractor.
- Also included in work requiring a license is the erection of scaffolding, connections to utility service lines, metering devices and sewer lines, mechanical or structural service to a structure or improvement and any other work in connection with the project.
- "Contractor" includes subcontractors, floor covering contractors, hardscape contractors and consultants representing themselves as having the ability to supervise or manage a construction project for the benefit of the property owner.
- Supervision or management includes hiring and firing of specialty contractors, scheduling of work on the project, and selection and purchasing of construction material.
- Contractors must be properly licensed before submitting bids.
What is the "Handyman Exemption"? Must all contractors be licensed?
Generally, if labor and materials exceed $1,000 OR a permit is required (regardless of the price of labor and materials), then a license is required. Please read the Arizona Revised Statutes on "Persons not required to be licensed; penalties; applicability" ARS §32-1121
To whom is the license issued?
A license may be issued to a sole proprietorship (individual), a partnership, limited liability company or a corporation. The license belongs to the business and not to the qualifying party.
If the ownership of a business changes, is the contractor's license considered to be part of the business?
No, a license is non-transferable, with the possible exception of a corporation or limited liability company. If stock is sold and the file number assigned by the Arizona Corporation Commission remains the same, the same license can be used if the license is active and in good standing.