Contractor License Qualifier Rules: What Happens to the License When You Sell a Contracting Business (2026)

The contractor license qualifier, not the owner, is what keeps the license alive

In 22 of the 26 states coded, the license is issued to the company but only stays valid while a named individual qualifies it. Selling the company does not move that person's exam, experience or certificate to the buyer.

Contractor license qualifier: The individual whose exam, experience and supervision a licensing board relies on to license a company. States use different names: qualifying agent (Florida, Georgia, Tennessee), responsible managing officer or employee (California, Hawaii), qualifying party (Arizona, Louisiana, South Carolina, Mississippi), responsible managing individual (Oregon), qualifying officer (Michigan).

We sorted the 26 states into four models. Most issue the license to the business through a named qualifier. Five (Florida, Georgia, Michigan, New Mexico, South Carolina) also give the qualifier a certificate or license of their own. Ohio, which has no statewide general contractor license, issues its commercial trade licenses to individuals who assign them to one company at a time (Ohio Rev. Code 4740.07). Connecticut, Delaware, North Dakota and Washington register businesses without any qualifier.

Alabama states the point directly: a license belongs to the entity regardless of the status of its qualifying party, and a qualifying party may serve several entities only as a 50% or larger owner of each (Ala. Admin. Code r. 230-X-1-.36). The entity owns the license, but it cannot use it without a qualifier.

This report covers ownership change and qualifiers only. State broker licensing is covered in business broker license rules by state; trade licenses such as electrical and plumbing follow separate rules and are not coded here, except in Ohio.

No coded state lets a buyer take the seller's license

Text in 11 states says the license is not transferable, 5 more require a new license when the entity changes, and the rest say nothing that would let a license move to a new owner.

A contractor license can stay with a company through a sale in one situation: the buyer purchases the licensed entity itself and the qualifier stays. In an asset purchase, the buyer's company is a new licensee and needs its own qualifier. CSLB tells California sole owners that the license number is not transferable and cannot be included in the sale of the business.

Several states treat a change in owners or form as a new licensee. Virginia voids the license when the business entity is dissolved or altered and gives the firm 30 days to apply again (18VAC50-22-210). Alabama, Georgia and Mississippi require a new application when a company changes form, for example from LLC to corporation. Arizona requires immediate notice when 25% or more of a licensed company's stock changes hands (A.R.S. 32-1151.01).

West Virginia is the only coded state with a transfer clause, and it is narrow: a license holder may move the license to a new business entity in which the holder is the principal owner, partner or officer (W. Va. Code 30-42-7(b)). An outside buyer cannot use it.

A company has between 0 and 120 days to replace a qualifier who leaves

18 states set a numeric window. The median is 60 days and the most common is 90. 4 states also restrict new work while the company searches.

The window matters most when the seller is also the qualifier. If the seller leaves at closing, the buyer's clock starts that day. In Michigan the residential builder license is suspended when the qualifying officer leaves, unless the department allows a reasonable time on request (MCL 339.2405(4)). In Oregon a company must have a responsible managing individual at all times and may use a temporary one for up to 14 days (ORS 701.093).

Notice deadlines are shorter than replacement windows in most states. Nevada and Utah want notice within 10 days, Arizona and South Carolina within 15, Georgia within 45 for the company, and Hawaii within 60, with automatic forfeiture if the notice is late (Haw. Admin. R. 16-77-64).

One qualifier rarely covers two companies without shared ownership

8 states set a common ownership test before a qualifier may serve a second company, from 20% to 51%. That limits a seller who hopes to stay on as qualifier for the buyer while running another firm.

Arizona allows one additional licensee, for 2 in total, and only with 25% common ownership (A.R.S. 32-1127). California allows up to 3 firms in any one-year period and only with 20% common ownership, a subsidiary or joint venture, or the same majority of officers (B&P 7068.1). South Carolina allows 2 entities only if both work from the same location and the qualifier owns at least 50% of one. Ohio lets an assigned trade license serve one contracting company at a time.

Florida leaves additional organizations to board discretion after the qualifier shows the ability to supervise each one (Fla. Stat. 489.119(6)). Georgia's board FAQ says a person may qualify more than one company, with a new application for each.

Half of US construction establishments are in states where the license rests on one person

The 22 qualifier states held 395,252 of 775,945 US employer establishments in construction of buildings and specialty trades in 2023, or 50.9%.

California (83,686 establishments) and Florida (65,271) together account for 148,957. States allowing 60 days or less held 175,359 establishments, or 22.6% of the US total. Qualifier states with no stated window (Minnesota, New Mexico, West Virginia, Wisconsin) held 37,977.

Counting by employer firms instead of locations gives a similar picture: summed state by state, Census Statistics of U.S. Businesses lists 380,911 employer firms in NAICS 236 and 238 in the 22 qualifier states in 2022. That sum counts a firm active in several states once in each.

Utah and Louisiana rewrote their qualifier law in 2025 and 2026

Two enacted changes and three introduced bills touch qualifier or transfer rules between 2025 and 2027.

Utah's H.B. 40 rewrites the Construction Trades Licensing Act from 2027-01-01. The qualifier rule keeps its 10-day notice and 60-day window, and it keeps the exception that lets a firm with 10 clean years name an active employee at renewal, unless more than 50% of its ownership was transferred in that period. For a sale, that exception ends when control changes.

Louisiana's Act 422 of 2025 rewrote R.S. 37:2156.1. The board rule still requires notice within 30 days and a new qualifying party within 60 days, and lets the licensee keep bidding but not begin new work in the trade until replaced (LAC 46:XXIX.109).

The 26-state registry, with citations

Each row rests on the statute, rule or board form saved on 2026-10-31, with a confidence flag.

Confidence is clear text when the source states the rule directly, and interpretation needed when we coded from a board form, a reporting deadline or conflicting official sources. Rows for Georgia, Tennessee, Virginia, Minnesota, Arkansas and West Virginia carry that flag.

Texas, New York, Illinois, Colorado and Pennsylvania are not in the registry: we did not identify a statewide general contractor license there to code, and Pennsylvania's home improvement registration material we opened did not address transfer. Local licenses can carry their own qualifier rules. For how a sale moves through its stages, see how a business sale works, and for questions to raise with an intermediary, see questions to ask a broker.

Ratios behind the comparison

Download the calculations (CSV)

Where the numbers diverge

1. In 22 of 26 coded states (2026), a contractor license depends on an individual qualifier who must stay with the company.^{[4][7][16][2]}
2. In 11 coded states the statute, rule or board text says a contractor license or registration is not transferable, including California, Nevada, Arizona, Virginia and Louisiana (2026).^{[4][14][2][23][10]}
3. In 5 more states (Alabama, Georgia, Mississippi, Oregon, South Carolina) the text requires a new license or application when the business entity changes (2026).^{[1][8][13][19][20]}
4. The median window to replace a departing qualifier is 60 days across 18 states that set one; Georgia allows 120 days and Michigan suspends the license on departure (2026).^[8][11][7]
5. Ninety days is the most common window, used by 7 states: California, Hawaii, Mississippi, North Carolina, Ohio, South Carolina and Tennessee (2026).^{[4][9][13][16][18][20][21]}
6. California allows 90 days after a responsible managing officer or employee disassociates, plus one 90-day extension, before the license is suspended or the class removed (CSLB, 2026).^[4][29]
7. Florida gives a business organization 60 days to employ a new qualifying agent when its only qualifier leaves, and bars new contracting until then except to finish incomplete contracts (Fla. Stat. 489.119(3)(a)).^[7]
8. Nevada keeps a license in force no more than 30 days after the qualifying individual leaves, unless the board extends the time for good cause (NRS 624.285).^[14]
9. North Carolina keeps the license valid for 90 days after the qualifier leaves, but the company may not bid on or undertake new contracts in that period (G.S. 87-10(c1)).^[16]
10. Arizona requires notice within 15 days and requalification within 60 days, and a licensed company must notify the registrar of any transfer of 25% or more of its stock (A.R.S. 32-1127.01, 32-1151.01).^[2]
11. 8 states set a common ownership threshold for a qualifier serving a second company, from 20% (California) to 51% (Hawaii) (2026).^{[4][9][14][2]}
12. The 22 qualifier states held 395,252 of 775,945 US employer establishments in NAICS 236 and 238 in 2023, or 50.9%.^[27]
13. States allowing 60 days or less held 175,359 establishments (22.6% of the US total, 2023); states allowing 90 days or more held 181,916.^[27]
14. Weighted by establishments, the median replacement window is 90 days, because California's 83,686 establishments sit in a 90-day state (CBP 2023).^[27][4]

Summary

• In 22 of the 26 states coded, a contracting company keeps its license only while a named individual, the qualifier, stays with it; the other 4 states use a registration with no qualifier.
• No coded state provides a way to move the license to an unrelated buyer's company. Text in 11 states says the license is not transferable, and 5 more require a new license or application when the business entity changes.
• When a qualifier leaves, 18 states set a replacement window. The median is 60 days, the most common is 90 days (7 states), and the range runs from 0 days in Michigan to 120 days in Georgia.
• 4 states allow 30 days or less: Michigan (0), Oregon (14 days with a temporary manager), Nevada (30) and Arkansas (30).
• 4 states limit new work while the company looks for a replacement: Florida, North Carolina and Hawaii bar new contracts, and Louisiana bars starting new work in the trade.
• 8 states let one qualifier serve a second company only with common ownership, from 20% in California to 51% in Hawaii; Arizona caps a qualifier at 2 licensees and California at 3 firms a year.
• Signature figure: 395,252 of the 775,945 US employer establishments in NAICS 236 and 238 (50.9%) are in the 22 qualifier states coded here (Census CBP 2023).

Frequently asked questions

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• All business sale research

Reproduce this analysis

Every figure comes from the files below. The scripts that pulled and computed them are kept with the report and can be re-run.

Data quality and exclusions

• CBP: kept 51 of 51 state rows for each of NAICS 236 and 238 with lfo '-'; legal-form breakdown rows dropped to avoid double counting; no suppressed establishment counts in the rows used.
• SUSB: kept the enterprise-size total (ENTRSIZE 01) only; state firm counts are not additive across states, so the 380,911 sum is labeled as a by-state sum.
• Registry: 6 further states were attempted but not coded (Alaska, Idaho, Illinois, Iowa, Massachusetts, Pennsylvania); reasons are in excluded.md.
• Registry: 11 of 26 rows rely at least partly on an Internet Archive copy of the official page because the live page blocked automated access, refused the connection or timed out.
• Registry: Tennessee and Arkansas rows rest on the boards' own forms, not on rule text; both are flagged interpretation needed.
• Discarded fetched files that were off target or blocked: Louisiana LAC docx (HTTP 403), Tennessee rules PDF (HTTP 403), Arizona administrative code PDF (HTTP 403), and statute pages for Idaho, Iowa and Massachusetts that did not address transfer or qualifiers.

Methodology

Scope. One row per state for the general contractor license, or for the main building license where no general license exists (Michigan residential builder, Wisconsin dwelling contractor, Ohio commercial trade licenses). We coded 26 states with a statewide contractor license or registration, including the largest construction states that have one. Trade licenses such as electrical and plumbing were not coded except in Ohio.

Sources. Every row rests on the statute, administrative rule or board form opened and saved on 2026-10-31. Where an official page blocked automated access or timed out, we used an Internet Archive copy of that official page and labeled it in the table. Law firm and vendor pages were used only to find citations and as pages to beat, never as evidence for a row.

Coding. License held by: entity through a named qualifier; both (the qualifier also holds a board-issued certificate or license); individual; or registration with no qualifier. Can the license pass to a buyer: no when the text says it is not transferable; not stated otherwise; with a separate flag when the text requires a new license for a new or changed entity. Days to replace: the period the text allows before suspension, invalidity or inactivity. Confidence is clear text or interpretation needed.

Conflicts. Where an agency FAQ and a rule disagreed (Georgia), we coded the rule and noted the FAQ. Where the statute and rule differed after an amendment (Louisiana), we coded the rule in force and described the change.

Derived metrics. Census County Business Patterns 2023 (posted 2025-06-26, the latest year on www2.census.gov) supplies employer establishments in NAICS 236 and 238 with legal form 'all'. Statistics of U.S. Businesses 2022 supplies employer firms. Each derived figure is in derived_metrics.csv with its formula and is reproduced by scripts/build_data.py.

Recheck. The registry is checked quarterly and after each legislative session; next check January 2027, when Utah H.B. 40 takes effect. Last checked 2026-10-31.

Readers looking for a broker to handle a sale can use the broker match form; nothing in this report depends on it.

This report presents published data with its limitations. It is not legal, financial or investment advice.

Sources, ranked by quality

Tier 1: primary and official sources (39)

• [1] Licensing Board for General Contractors. Alabama: Ala. Admin. Code r. 230-X-1-.04; 230-X-1-.36. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [2] Registrar of Contractors (ROC). Arizona: A.R.S. 32-1101(A)(8); 32-1124(B), (G); 32-1127; 32-1127.01; 32-1151.01. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [3] Contractors Licensing Board (Department of Labor and Licensing). Arkansas: Arkansas Contractors Licensing Board, qualifier change form (rev. 01/2024). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [4] Contractors State License Board (CSLB). California: Cal. Bus. & Prof. Code 7068, 7068.1, 7068.2 (as applied by CSLB). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [5] Department of Consumer Protection. Connecticut: Conn. Gen. Stat. 20-427(e). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [6] Department of Labor. Delaware: 19 Del. C. 3606(b). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [7] Construction Industry Licensing Board (CILB). Florida: Fla. Stat. 489.119(2), (3)(a), (6); 489.1195(3). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [8] State Licensing Board for Residential and General Contractors. Georgia: Ga. Comp. R. & Regs. 553-11-.01(1)(c); 553-11-.02(1)(b). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [9] Contractors License Board (DCCA). Hawaii: Haw. Admin. R. 16-77-64; 16-77-72; 16-77-73. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [10] State Licensing Board for Contractors (LSLBC). Louisiana: La. R.S. 37:2156(K); 37:2156.1(D); LAC 46:XXIX.109(D), (E); 46:XXIX.119. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [11] Department of Licensing and Regulatory Affairs (LARA). Michigan: MCL 339.2405(1), (4). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [12] Department of Labor and Industry. Minnesota: Minn. Stat. 326B.802 subd. 10; 326B.805 subd. 4, 5(b); 326B.83 subd. 2(14). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [13] State Board of Contractors (MSBOC). Mississippi: 30 Miss. Admin. Code Pt. 802, R. 1.1(l), (n) (commercial rules, revised 2022). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [14] State Contractors Board. Nevada: NRS 624.260(5); 624.285; 624.305. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [15] Construction Industries Division (CID). New Mexico: 14.6.3.8(A)(3)(c), (A)(5), (E) NMAC. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [16] Licensing Board for General Contractors. North Carolina: N.C. Gen. Stat. 87-10(b), (c1). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [17] Secretary of State (contractor licensing). North Dakota: N.D. Cent. Code 43-07-04; 43-07-09.1. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [18] Ohio Construction Industry Licensing Board (OCILB). Ohio: Ohio Rev. Code 4740.07. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [19] Construction Contractors Board (CCB). Oregon: ORS 701.091; 701.093; 701.114. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [20] Contractor's Licensing Board (LLR). South Carolina: S.C. Code 40-11-230; 40-11-240(D). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [21] Board for Licensing Contractors. Tennessee: T.C.A. 62-6-115; Tenn. Comp. R. & Regs. 0680-01-.23 (as stated on the board's QA change form). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [22] Division of Professional Licensing (DOPL). Utah: Utah Code 58-55-304(3) to (7) (superseded 2027-01-01 by 58-55-107 under 2026 H.B. 40). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [23] Board for Contractors (DPOR). Virginia: 18VAC50-22-60; 18VAC50-22-210; 18VAC50-22-220. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [24] Department of Labor and Industries. Washington: RCW 18.27.010(14); 18.27.020(2)(d); 18.27.030(3). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [25] Contractor Licensing Board (Division of Labor). West Virginia: W. Va. Code 30-42-7(b). Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [26] Department of Safety and Professional Services (DSPS). Wisconsin: Wis. Stat. 101.654(1); Wis. Admin. Code SPS 305.31(1), (3); SPS 305.315. Law or rule as read 2026-10-31. Accessed 2026-10-31.
• [27] U.S. Census Bureau. County Business Patterns 2023, state file (cbp23st.zip). 2023; file posted 2025-06-26. Accessed 2026-10-31.
• [28] U.S. Census Bureau. Statistics of U.S. Businesses 2022, state by 6-digit NAICS. 2022; file posted 2025-04-10. Accessed 2026-10-31.
• [29] California Contractors State License Board. Disassociation Request (form 13M-5). Form as posted 2026. Accessed 2026-10-31.
• [30] California Legislative Information. Business and Professions Code 7068 and 7068.1. Internet Archive copies, 2025 and 2026. Accessed 2026-10-31.
• [31] Utah Legislature. H.B. 40 Utah Construction Trades Licensing Act Amendments, enrolled. 2026 General Session; effective 2027-01-01. Accessed 2026-10-31.
• [32] Louisiana Legislature. Resume digest, Act 422 (S.B. 122), 2025 Regular Session. 2025; effective 2025-08-01. Accessed 2026-10-31.
• [33] Louisiana Legislature. S.B. 122 enrolled, 2025 Regular Session. 2025. Accessed 2026-10-31.
• [34] Louisiana State Licensing Board for Contractors. Contractors Licensing Law and Rules and Regulations (August 1, 2024). Law through the 2024 session; rules as of 2024-08-01. Accessed 2026-10-31.
• [35] Arizona Legislature. S.B. 1190 (introduced), registrar of contractors; successors; discipline. 2026 session. Accessed 2026-10-31.
• [36] West Virginia Legislature. S.B. 553 (introduced), transfer of contractor licenses. Introduced 2026-01-21. Accessed 2026-10-31.
• [37] West Virginia Legislature. S.B. 616 (introduced), termination of the Contractor Licensing Board. Introduced 2026-01-27. Accessed 2026-10-31.
• [38] Georgia Secretary of State. Residential and Commercial General Contractors FAQ (Internet Archive copy, 2026-04-24). April 2026. Accessed 2026-10-31.
• [39] Mississippi State Board of Contractors. Application for Change in Qualifying Party. Form as posted 2026. Accessed 2026-10-31.

Tier 3: journalism and expert commentary (3)

• [40] IMV. California Contractor Qualifier Roles Explained. Undated guide. Accessed 2026-10-31.
• [41] Simas & Associates. Qualifying Individual for Contractor License. Undated article. Accessed 2026-10-31.
• [42] Construction Executive. Three Things to Consider When Buying or Selling a Construction Company. Undated article. Accessed 2026-10-31.