Mechanical Contractors License Group 4 ($60,000) Bond - Statewide in South Carolina

Brief Summary

A $60,000 surety bond gets a South Carolina mechanical contractor into Group 4 without filing a CPA compiled financial statement. The bond stands in for the $60,000 net worth the Contractor's Licensing Board requires, supports bids and jobs up to $400,000 each, and stays on file for as long as the license is active.

South Carolina sets mechanical contractor bond amounts by license group, not by job size. Under S.C. Code 40-11-260, a Group 4 mechanical contractor may bid and perform jobs up to $400,000 per job and must show a net worth of $60,000 or working capital of $40,000. Section 40-11-262 lets the contractor post a $60,000 surety bond, equal to the net worth figure, instead of the financial statement. The bond is filed with the South Carolina Contractor's Licensing Board and must remain in force while the license is held.

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How to Apply for a Mechanical Contractors License Group 4 ($60,000) Bond:

• Confirm Group 4 fits your work: no single job above $400,000.
• Have the business name exactly as registered with the S.C. Secretary of State and shown on the license application.
• Complete the bond application for the surety's review.
• The surety executes the board's Surety Bond for Mechanical Contractors form for $60,000 and attaches its power of attorney.
• File the bond with the Contractor's Licensing Board with the initial application and $350 license fee, or with your renewal.
• Renew by October 31 of odd numbered years and keep the bond continuously in force.

Detailed Information About the South Carolina Mechanical Contractors License Group 4 ($60,000) Bond:

The bond follows the net worth figure

Mechanical contractors in South Carolina are placed in one of five groups according to the largest job they may take. The group sets the financial requirement. A Group 4 mechanical contractor may bid and perform jobs not exceeding $400,000 per job and must show either $60,000 in net worth or $40,000 in working capital under S.C. Code 40-11-260.

Section 40-11-262 allows a surety bond instead of the financial statement, in the same amount as the net worth required for the group. That makes the Group 4 bond $60,000. It cannot be reduced to the $40,000 working capital figure.

All five mechanical contractor groups

• Group 1: jobs up to $35,000, net worth $7,000 or working capital $3,500, bond $7,000
• Group 2: jobs up to $100,000, net worth $15,000 or working capital $10,000, bond $15,000
• Group 3: jobs up to $200,000, net worth $30,000 or working capital $20,000, bond $30,000
• Group 4: jobs up to $400,000, net worth $60,000 or working capital $40,000, bond $60,000
• Group 5: no job limit, net worth $300,000 or working capital $200,000, bond $300,000

Group 4 is the highest mechanical group that accepts a compiled statement. Group 5 requires an audited balance sheet on the first application.

Why Group 4 contractors use the bond

An initial Group 4 application must include a financial statement compiled by a licensed CPA in accordance with GAAP. At renewal an owner prepared statement is also accepted. Posting the $60,000 bond removes the need for either, and a contractor who later files a qualifying financial statement can release the bond.

What the bond guarantees

The board's Surety Bond for Mechanical Contractors form names the South Carolina Contractor's Licensing Board, the State of South Carolina and any person or business sustaining damage as obligee. By statute the bond protects anyone damaged by the contractor's breach of a construction contract, or of a contract for labor, materials or professional services, or by an unlawful act or omission in performing construction. Claims are filed on a board approved claim form.

Other terms

• Written by a surety authorized to transact surety business in South Carolina
• Continuous and kept in force while the license is held
• In addition to any other bond required by law or by a contract
• Cancelable only on 30 days notice to the board, after which the contractor has ten days to file proof of net worth or working capital or the license is suspended
• The board may require a larger bond after a violation

License basics

S.C. Code 40-11-30 requires a license for mechanical contracting jobs greater than $10,000. The initial license fee is $350. Mechanical contractor licenses expire October 31 of odd numbered years and renew every two years for $135. Bidding above the Group 4 limit can draw a penalty under Section 40-11-280.

Eligibility and Requirements for a South Carolina Mechanical Contractors License Group 4 ($60,000) Bond:

• Bond amount of $60,000, equal to the Group 4 net worth requirement in S.C. Code 40-11-260.
• Surety authorized to transact surety business in South Carolina.
• Board form naming the Contractor's Licensing Board, the State of South Carolina and any person or business sustaining damage as obligee.
• At least 30 days written cancellation notice to the board.
• Power of attorney attached.
• Exams, experience and all other license requirements still apply. The bond replaces only the financial statement.

South Carolina Mechanical Contractors License Group 4 ($60,000) Bond FAQs:

Official and Additional Resources for the South Carolina Mechanical Contractors License Group 4 ($60,000) Bond: