Proof of Financial Standing for NC General Contractor License Application

Proof of Financial Standing for NC General Contractor License Application

To become a licensed general contractor (GC) in North Carolina, applicants must meet six primary requirements. According to the North Carolina Licensing Board for General Contractors, applicants must complete the Application for License to Practice General Contracting in the State of North Carolina, be at least 18 years of age, be properly registered to conduct business in North Carolina, possess good moral character, successfully complete an examination based on the desired classification of license, and meet the minimum financial requirement based on the limitation of license you are applying for. For some license tiers, proof of financial standing in the form of audited financial statements is required when submitting your NC general contractor license application.

Both individuals and businesses can obtain the general contractor license, but it is only valid for work done under the name that is licensed and the license cannot be shared by separate legal entities.

Financial Statements

Along with the application, the applicant’s financial standing must be provided. For some license tiers, proof of financial standing must be provided in the form of an audited financial statement. Applicants must meet a working capital or net worth requirement based on the license tier. The license limitation tiers are Limited License, Intermediate License, or Unlimited License. The financial requirements for each tier are as follows:

Limited NC General Contractor License:

  • Working capital equal to or greater than $17,000
  • Net-worth equal to or greater than $80,000
  • Agreed-upon Procedures Report or Audited financial statement is required only if the applicant or any owner, principal, or qualifier is in bankruptcy or has been in bankruptcy within five years prior to filing the application.

Intermediate NC General Contractor License:

  • Working capital equal to or greater than $75,000.
  • Agreed-upon Procedures Report or Audited financial statements is REQUIRED

Unlimited NC General Contractor License:

  • Working capital equal to or greater than $150,000.
  • Agreed-upon Procedures Report or Audited financial statements is REQUIRED

Financial statements may be no older than 12 months from the date of submission and must be prepared in conformity with generally accepted accounting principles (GAAP). Financial statements must be in the same name as the name of the applicant presented on the application.

Audited Financial Statements Must be Prepared by a CPA

Audited financial statements must be performed by a certified public accountant (CPA) or an independent accountant engaged in the public practice of accountancy. Audits must include an unqualified opinion, classified balance sheet, and notes to the financial statement. Reviewed financial statements and compilation reports will not be accepted. An Agreed-Upon Procedure Report will be accepted if it is also prepared by a CPA or independent accountant engaged in the public practice of accountancy.

NC General Contractor License

General Contractor License Renewals

The GC licenses require an annual renewal.  All licenses expire January 1 and become invalid sixty days after the expiration date.  The GC license renewal process begins in October each year.  Applications for renewal licenses must be accompanied by evidence of continued financial responsibility and completion of continuing education requirements.  An attestation of continued financial responsibility may be required based on the license tier requirements previously noted.  The licensing Board may require an audited financial statement if the licensee is insolvent, financially unstable or unable to meet financial responsibilities based on the information in the renewal application.

Additional information can be found on the North Carolina Licensing Board for General Contractors websites are:www.nclbgc.org and www.ncclic.org

If you are in the process of obtaining or renewing your general contractors license and believe you require an audited financial statement or agreed-upon procedures report for your application, contact our CPAs for assistance.

Also see our article: Tennessee Contractors License: Financial Statements Article

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2023-10-25T14:03:27+00:00August 2nd, 2023|Audit, Business, Construction, Licensing|

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