If you’re starting a contracting business in Michigan, there are a few factors you need to know about before you get started. Depending on your trade, there might be some contracting licensing requirements you need to meet before you can hang up your shingle — plus, where you plan to work can definitely impact your start-up checklist.
To help you start your business successfully, we put together this guide to Michigan contractor licensing. It should help to clear up any confusion and get you started off on the right foot.
For information on licensing in other states, check out The Ultimate Guide to Contractors License Requirements in Every State.
Table of Contents
Who needs a contractor license in Michigan?
Michigan’s licensing requirements are pretty stringent: Just about every contractor working within the state needs to carry a license or registration of some sort. In fact, it’s easier to explain who doesn’t need a license than who does.
General contracting businesses working on projects valued at less than $600 do not require a license. Just about everyone else needs to carry one, and we’ll go further into that in a bit.
Also, all Michigan businesses have to register with the state’s Department of Treasury. You’ll receive the necessary tax license and permits to work within the state. If you’re operating as a DBA (Doing Business As), you’ll have to register with the Department of Licensing and Regulatory Affairs, or LARA (you’ll see this organization mentioned quite a bit).
Do you need a license to file a mechanics lien in Michigan?
Michigan’s licensing and mechanics lien laws are strict. If you’re working on a residential project in a capacity that legally requires a license, you won’t have rights to a mechanics lien if the customer doesn’t pay.
While you should always strive to follow state laws and regulations, it becomes even more important when your payments are at risk. If your trade requires a license, you better carry one.
Learn all the ins and outs of filing a mechanics lien in Michigan with Michigan Mechanics Liens: Everything You Need to Know + Free Forms.
Getting a Michigan state contractor licenses
How to get a Michigan state general contractor license
General contractors working on projects valued in excess of $600 must carry either a residential builders license or a maintenance and alterations contractor license. Both of these licenses are available through the state’s Department of Licensing and Regulatory Affairs.
Both licenses require a 60-hour prelicensure course before you’re allowed to take the examination. So essentially, you have to apply and take a course before applying to take a test for a license.
The general requirements for both of these exams are:
- Must be 18 or older
- Must hold a Michigan driver’s license
- Complete the 60-hour course
- Pass the residential contractor or maintenance and alteration contractor test
- Pay licensing fees ($195 license fee, $185 annual renewal)
Commercial contractors will have to check with local municipalities about licensing, but licensing as a whole is more relaxed for commercial outfits.
How to get a Michigan state electrical license
There are two types of electrical licenses contractors need to be aware of when starting an electrical contracting business in Michigan: Master Electrician License and Electrical Contractor License. Both are matters of the Department of Licensing and Regulatory Affairs.
To become an electrical contractor in Michigan, either you or someone in your employ full-time must hold a Master Electrician License. This person must be 22 years of age and hold a journeyman’s license for at least two years. They must also have 12,000 hours of experience obtained over a period of not less than six years. They can then apply to take the examination.
Once you or an employee of yours hold a Master Electrician License, you may apply for an Electrical Contractor License. This license also requires you to pass an examination.
How to get a Michigan state plumbing license
Similar to an electrical license, there are two types of licenses that Michigan plumbing contractors must hold: Master Plumber and Plumbing Contractor License. Both fall under the Department of Licensing and Regulatory Affairs.
To become a plumbing contractor in Michigan, you or someone you employ full-time must hold a master plumber’s license. This person must be 18 years old and have 4,000 hours of experience working as a journeyman plumber over a period of not less than two years immediately preceding the application date. They also must pay the application fee and take the exam.
Once you have a licensed master plumber under you, you’re able to apply for a plumbing contractor license. In addition to the master plumber license, the person applying must be an owner of a sole proprietorship or partnership, or be the officer of a corporation or LLC. They must pay the exam fee and pass the exam as well.
Both licenses use this application.
How to get a Michigan state mechanical contractor license
Mechanical contractors must also carry a state-issued license in Michigan.
Requirements are relatively straightforward. An applicant must have a minimum of 3 years experience in one of the work classifications applied for below:
- Hydronic heating and cooling and process piping
- HVAC equipment
- Limited heating service
- Unlimited heating service
- Limited refrigeration and air conditioning service
- Unlimited refrigeration and air conditioning service
- Fire Suppression
- Specialty License
- Solar Heating and Cooling
- Solid Fuel and Vented Decorative Gas Appliances
- LP Distribution Piping
- Fuel Gas Piping
- Fuel Gas Piping and Venting
- Must take and pass an examination for each work classification desired.
These contractors will have to apply for an exam, pass it, and pay the required fees.
Related reading: Illinois contractor licensing rules
Michigan contractor licenses by city
Commercial general contractors, as well as some trades, will have to check with local jurisdictions for licensing requirements.
Detroit doesn’t have any specific requirements for general contractors and plumbers outside of the state’s statutes. However, electrical contractors do get some special attention from the Motor City.
Also, the following trades need to apply for and pass an examination in Detroit:
- Awning Erector
- Sign Erector
- Wrecking and Demolition
Licensing in Grand Rapids, Michigan, is fairly straightforward, as it leaves most of the contracting license requirements up to the state. There are a few licenses that the city does require, complete with required tests:
You will also need to register your state license with Grand Rapids:
- State Electrical Contractor’s License
- State Fire Alarm Contractor’s License
- State Sign Specialty Contractor’s License
- State Residential Builder’s License
- State Mechanical Contractor’s License
- State Plumbing Contractor License
Contractors in Warren have very few city-ordered requirements to follow. While the city overwhelmingly recognizes state-issued licenses, there are licenses for building wreckers and cement contractors. Otherwise, contractors need to register the same as other businesses.
All businesses operating within the city of Sterling Heights have to register with the City Clerk. There are no other requirements for contractors.
Ann Arbor does not have any specific licensing requirements pertaining to contractors at this time.
Penalties for unlicensed contracting in Michigan
On top of forfeiting your lien rights on residential projects, the penalties for unlicensed contracting in Michigan are steep.
The first offense is punishable by a fine of $5,000 and $25,000, one year in jail, or both. Subsequent violations extend the jail time to up to two years.
Protecting your payments in Michigan
If you’re not on the level with the licensing board wherever you’re working in Michigan, you’re putting your payments at risk. Cash flow issues are the norm in construction, and not having the right to a mechanics lien to back your payments up can make them worse.
Beyond licensing, contractors and subs also need to keep their eyes on deadlines. General contractors need to supply preliminary notices upon request, while subs and suppliers need to send them within 20 days on every job. They also have 30 days from the last furnishing to file a mechanics lien — not a lot of time to be lax with your payments.
Between these strict deadlines and licensing requirements, it becomes even more critical that contractors understand their mechanics lien rights and protect their payments.