How to Start a General Contractor Business in Virginia: RBC, CBC or HIC and Class C, B or A

October 29, 2026

Virginia does not issue a single license called a "general contractor license." The Department of Professional and Occupational Regulation (DPOR) licenses contractors by classification (residential building, commercial building, or home improvement) and by class (C, B or A), which is set by the size of the work you take on. The license is issued to a firm, not to you personally, so the order you set up your business matters. This guide covers the business side: choosing your classification and class, forming the entity, insurance and workers' compensation, contracts, and the local license. For the DPOR application mechanics, see our Virginia contractor license DPOR requirements guide.

This article is informational content, not legal or tax advice. Virginia contractor rules, fees and local license rules change. Confirm current details with the agencies named below before you act, and talk to a Virginia attorney and a CPA before you choose an entity or sign contracts.

What You Need Before You Start

Gather these items before you file anything. Most of them are needed for the entity filing or the DPOR application.

• A business name ending in an accepted form such as LLC, L.L.C., Limited Company or Limited Liability Company, and distinguishable from names already on file with the State Corporation Commission (SCC). You can reserve a name for $10 for 120 days.
• A registered agent who meets Virginia's residency and office requirements (covered in Step 3).
• Funds for the Articles of Organization ($100 for an LLC, or $75 for a corporation), plus the DPOR initial fee for your class and the $25 Recovery Fund assessment.
• Records documenting your qualified individual's experience: 1 year for Class C, 3 years for Class B, and 5 years for Class A.
• For Class B or Class A: a designated employee who has passed the business exam, and proof of financial responsibility (a net worth test or a bond).
• Proof that you completed the 6-hour pre-license course, if DPOR requires it for your application. Confirm the requirement and the approved providers with DPOR.
• Insurance quotes, starting with general liability and, once you have three or more employees, workers' compensation.
• Your city or county's Business, Professional and Occupational License (BPOL) application, where the locality levies one.

Step 1: Choose Your Classification (RBC, CBC or HIC)

Your classification depends on the type of building you work on. The definitions appear in 18VAC50-22-20 and 18VAC50-22-30 of the Board for Contractors regulations.

• Residential building (RBC) covers dwellings and townhouses. It includes the work of concrete, home improvement, masonry, painting, roofing, finish carpentry and similar specialties done on those buildings.
• Commercial building (CBC) covers commercial, industrial, institutional and government buildings, including multi-family housing. It cannot be used for dwellings and townhouses.
• Home improvement contracting (HIC) is a specialty for repairs and improvements to dwellings, townhouses and their attached structures. It does not cover new construction beyond decks, patios, driveways and small outbuildings that need no permit.

Choose RBC if you build or remodel houses and townhouses across the full residential scope. Choose CBC if your projects are apartments, offices, retail, or public buildings. Choose HIC if you focus on repairs and improvements to existing homes and do not need the broader residential scope.

None of these classifications covers electrical, plumbing, HVAC or gas fitting. Those trades require a master tradesman as the qualifier. See our Virginia tradesman license guide if any of that work is part of your plan.

Two exemptions may remove the need for a license on certain jobs. Work of $25,000 or less per project done for a properly licensed RBC, CBC or home improvement contractor is exempt under Va. Code 54.1-1101 A. An owner working on one primary residence once in 24 months is also exempt. Do not rely on either exemption for a business that bids work on its own, and confirm how they apply to your situation with DPOR.

Step 2: Pick Your Class and Understand the Cost

Your class depends on the value of your contracts. A single contract can move you into a higher class, and so can your total work over 12 months. Since the classes took effect on July 1, 2025 (confirm the effective date with DPOR), the rules work as follows, based on Va. Code 54.1-1100:

Class	Single contract	Or total work in 12 months	Initial DPOR fee	Qualified individual experience	Additional requirements
Class C	Over $1,000 to under $30,000	Under $250,000	$235, plus $25 Recovery Fund assessment	1 year	Confirm exam steps with DPOR
Class B	$30,000 to under $150,000	$250,000 to under $1 million	$380, plus $25 Recovery Fund assessment	3 years	Designated employee who passed the business exam; net worth of $15,000, or a $50,000 bond
Class A	$150,000 or more	$1 million or more	$400, plus $25 Recovery Fund assessment	5 years	Designated employee who passed the business exam; net worth of $45,000, or a $50,000 bond

The 12-month test catches many new contractors off guard. Suppose you take fifteen $20,000 kitchen and bath jobs in one year. Each job is Class C size, but together they total $300,000, which is over the $250,000 Class C limit for 12 months. That puts you in Class B.

Before you apply, confirm the current fees and the exam steps with DPOR at dpor.virginia.gov, because fees and procedures can change. The pre-license course is 6 hours. Confirm whether it applies to your application and which providers DPOR approves.

Step 3: Set Up the Entity First

Form the entity before you apply to DPOR so the license is issued in the firm's name. Most new contractors in Virginia form an LLC. A corporation is an option if you plan to issue stock or bring in investors, and your CPA can help you compare the two.

LLC filing. File Articles of Organization (Form LLC1011) with the SCC Clerk's Information System at cis.scc.virginia.gov. The filing fee is $100. Expedited online service is available: next day for $50 or $100 (submit by 2:00 PM Eastern, response by 4:00 PM the next business day), or same day for $200 (submit by 10:00 AM Eastern, response by 4:00 PM). Expedited service is online only and nonrefundable, so it speeds up only the SCC step, not your DPOR review.

Registered agent. A Virginia entity must keep a registered agent who is a Virginia resident with a Virginia street address for the registered office. The agent must be available during business hours and must be either a member of the Virginia State Bar or a member, manager, officer, trustee or general partner of the entity. An entity cannot serve as its own registered agent. Commercial registered agent services exist, and they charge an annual fee, so price them against your own availability.

Annual fee. A Virginia LLC files no annual report. It pays a $50 annual registration fee to the SCC. The fee is due on the last day of the 12th month after the month the LLC was organized, and every year after that. The SCC assesses the fee about two months ahead. A late payment adds a $25 penalty, and the LLC is canceled at the end of the third month after the due date.

Corporation filing. If you incorporate, file Articles of Incorporation (Form SCC619) for $75. A corporation files an annual report and pays an annual registration fee based on authorized shares: $100 for up to 5,000 authorized shares, plus $30 for each additional 5,000 shares. Check the SCC annual fee schedule for current figures. The annual registration fee is due the last day of the formation month, and the annual report is due the last day of the 12th month after formation. You may file the annual report no earlier than three months before that deadline.

Assumed name (DBA). If you operate under a trade name, file an Assumed Name Certificate with the SCC for $10. It is filed with the SCC, not the circuit court, and Virginia does not require newspaper publication.

Name reservation. If you need time to file, reserve the name for $10 for 120 days. You can renew it during the 45 days before it expires.

Step 4: Get Insurance and Workers' Compensation

Workers' compensation is required in Virginia once three or more employees are regularly in service, under Va. Code 65.2-101. The civil penalty for failing to carry it is up to $250 per day, with a maximum of $50,000 (Va. Code 65.2-805). That penalty applies to workers' compensation only. It does not apply to liability insurance. Ask your insurer how part-time and seasonal workers are counted toward the three-employee threshold, since the answer depends on your facts.

Liability limits are not set by a DPOR rule for Class C contractors. Your clients, your contracts and your insurer determine the coverage you need, so ask your insurer and your clients what they require. Bonds show up in two places: the financial option for Class B and Class A, described in Step 2, and whatever a specific client or project requires. Neither is a general requirement for every contractor. Get written quotes before you bid on work, and keep certificates of insurance on file for each project.

Step 5: Set Up Your Contracts

Starting January 1, 2027, the Board must require written contracts for residential work, under 2026 Acts of Assembly chapters 851 and 852. Read the Board's regulations for the terms a contract must include, and build your template around them now. Solar contracts carry additional disclosure requirements under Va. Code 54.1-1117.1.

Contracts matter for another reason. Under Va. Code 54.1-1115 C, a contract performed by an unlicensed contractor may be unenforceable. If you are not licensed for the class of work in a contract, you may not be able to collect payment through the courts. Confirm your license is active before you bid, and never let a project start before the license covers its value and classification.

A practical contract should state the scope of work, the price and payment schedule, how change orders are priced and approved, the start and completion expectations, your license number, and your insurance details. Have a Virginia attorney review the template before you use it on a real project.

Step 6: Get Your Local License (BPOL)

Virginia has no general statewide business license. The SCC forms entities but issues no business license. The local business license is the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 et seq. Each city or county administers it, usually through the Commissioner of the Revenue.

Not every locality levies a general BPOL. Under Va. Code 58.1-3704, a locality may levy none. Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna are examples of localities without a general county license. Towns can also displace the county tax. Check the specific locality where you have an office or do work.

The statute sets a floor based on population. A locality with more than 50,000 people cannot require a license for businesses with gross receipts under $100,000. A locality with 25,000 to 50,000 people cannot require one for gross receipts under $50,000. Localities under 25,000 have no floor. Localities over 50,000 may waive the license for businesses up to $200,000 in gross receipts. Confirm that waiver ceiling with your locality.

Localities set their own rates and deadlines. For contractors, the rate is capped at 16 cents per $100 of gross receipts under Va. Code 58.1-3706, but the actual rate varies by locality. Do not assume the rate in one county applies elsewhere.

Localities also cannot issue or renew a contractor's business license without your DPOR license number, or an affidavit that you are not subject to licensure (Va. Code 54.1-1111 B). Have your DPOR number ready before you apply.

If you run the business from a home office, the home office locality is the one that taxes you. Under Va. Code 58.1-3715, a contractor taxed at a home office owes another locality only once work there exceeds $25,000 in a year. Keep job-by-job records showing where the work was performed.

Expected Results

Working through these steps in order may leave you with a formed entity, a DPOR application on file, the insurance and contracts you need for your first bids, and a local license where your locality requires one. Timelines vary with the SCC, DPOR and your locality's workload, so confirm current processing times with each agency before you plan your first project. Expedited SCC service may shorten the entity step, but it does not change how long DPOR takes to review your application.

Common Mistakes to Avoid

• Applying to DPOR before forming the entity. The license belongs to the firm, so the entity must exist first.
• Treating "general contractor" as a license title. Your license is a classification and class. Describe your scope accurately in your marketing and contracts.
• Using the wrong classification. CBC cannot be used for dwellings and townhouses. Choosing RBC for an office build-out or CBC for a house remodel can leave you unlicensed for the work.
• Taking electrical, plumbing, HVAC or gas work under RBC, CBC or HIC. Those trades need a master tradesman as the qualifier.
• Counting only single contracts. Your class also depends on your total work over 12 months, as the fifteen-job example shows.
• Misreading the DBA filing. An assumed name is filed with the SCC for $10, not the circuit court.
• Missing the annual $50 registration fee. A late payment adds a $25 penalty, and an LLC that stays unpaid can be canceled.
• Assuming your city or county has a BPOL. Some localities levy none, and the rate and filing deadlines differ by locality.
• Working before the license covers the job. An unlicensed contractor's contract may be unenforceable under Va. Code 54.1-1115 C.
• Treating liability limits as a DPOR rule. Your clients and your insurer set the coverage you need.

Tips for a Smoother Setup

• Reserve your business name early if you have a specific name in mind, since it costs $10 for 120 days.
• Start a file for your qualified individual's experience now. Dated project records and references are easier to gather while the jobs are fresh.
• For Class B or Class A, decide early whether you will use the net worth test or a bond, and get the financial documents ready.
• Calendar your SCC deadlines and your locality's BPOL deadline as soon as you receive them.
• Use the Virginia Small Business Development Center network at virginiasbdc.org for free planning help before you commit to an entity or a class.

Where to Confirm the Details

• State Corporation Commission, Clerk's Office: scc.virginia.gov/businesses (entity filings, name reservation, DBA)
• SCC Clerk's Information System (online filing): cis.scc.virginia.gov
• Department of Professional and Occupational Regulation: dpor.virginia.gov (classes, fees, exam and course requirements)
• Virginia Department of Taxation: tax.virginia.gov (corporate income tax is a 6% flat rate, and personal income tax runs from 2% to 5.75%)
• Code of Virginia: law.lis.virginia.gov/vacode
• Your city or county's Commissioner of the Revenue, for BPOL rates and deadlines

Disclaimer

This article is informational content, not legal or tax advice. It does not create an attorney-client or accountant-client relationship. Virginia's contractor, entity and local tax rules change, and some figures depend on the facts of your business. Verify current requirements with DPOR, the SCC, Virginia Tax and your locality before you act. For a complex situation, such as multiple entities, large contracts, employees or mixed trades, consult a qualified Virginia attorney and a certified public accountant.