SC House Bill 4115 was signed by South Carolina Governor Henry McMaster, which increased the licensing limits, and changed the financial requirements for general contractor and mechanical contractor licenses in South Carolina. The previous, extensive changes to the law occurred in 1999. The following are the changes for the general and mechanical contractor license limits:
GENERAL CONTRACTORS
| Old Limits | New Limits | |||
|---|---|---|---|---|
| Group Number | $ Limit Per Job | Net Worth Requirement | $ Limit Per Job | Financial Requirements |
| Group #1 | $50,000 | $10,000 | $100,000 | $20,000 *NW or $10,000 *WC |
| Group #2 | $200,000 | $40,000 | $400,000 | $60,000 NW or $40,000 WC |
| Group #3 | $500,000 | $100,000 | $1,000,000 | $150,000 NW or $100,000 WC |
| Group #4 | $1,500,000 | $175,000 | $3,000,000 | $250,000 NW or $175,000 WC |
| Group #5 | $Unlimited | $250,000 | $Unlimited | $350,000 NW or $250,000 WC |
(*NW-net worth/*WC-working capital)
MECHANICAL CONTRACTORS
| Old Limits | New Limits | |||
|---|---|---|---|---|
| Group Number | $ Limit Per Job | Net Worth Requirement | $ Limit Per Job | Financial Requirements |
| Group #1 | $17,500 | $3,500 | $35,000 | $7,000 *NW or $3,500 *WC |
| Group #2 | $50,000 | $10,000 | $100,000 | $15,000 NW or $10,000 WC |
| Group #3 | $100,000 | $20,000 | $200,000 | $30,000 NW or $20,000 WC |
| Group #4 | $200,000 | $40,000 | $400,000 | $60,000 NW or $40,000 WC |
| Group #5 | $Unlimited | $200,000 | $Unlimited | $300,000 NW or $200,000 WC |
(*NW-net worth/*WC-working capital)
So, what does this mean for businesses? It means easier access to perform larger projects that may have been previously out of reach or occurred outside of limits due to inflationary changes. Increases in license levels will require various levels of financial statement assurance by a contractor’s independent CPAs (Certified Public Accountants). Contractors should consider all costs and benefits when evaluating license level changes.
For more information, please reach out to a FORVIS professionals or use the Contact Us form below.