Starting Your Electrical Business in Michigan: LARA Guide

This guide will walk you through the essential steps and requirements for starting an electrical business in Michigan. We’ll clarify the critical differences between holding a personal license and a contractor license, outline the path to getting there, and explain the ongoing compliance needed to build a successful and lasting enterprise.

The Critical First Step: From Master Electrician to Licensed Contractor

The single most important concept to grasp is that a Master Electrician license and a Michigan Electrical Contractor license are not the same thing. While one is a prerequisite for the other, only a licensed contractor can legally enter into contracts to perform electrical work for the public, hire other electricians, and operate a business. This distinction is central to the Skilled Trades Regulation Act (Public Act 407 of 2016), the primary law governing these professions in the state.

All electrical licensing is overseen by the LARA Electrical Division, under the authority of the Bureau of Construction Codes (BCC). According to the Skilled Trades Regulation Act, to obtain an electrical contractor’s license, your business must either be owned by a licensed Master Electrician or employ a licensed Master Electrician on a full-time basis who resides in Michigan. This individual is ultimately responsible for all work, supervision, and compliance with the Michigan Electrical Code.

The Path to Becoming an Electrical Contractor in Michigan

If you’re not yet a Master Electrician, your journey to business ownership involves a clear, multi-step progression through LARA’s licensing tiers. Each step requires a significant investment in time and documented experience.

License Progression at a Glance:

• Electrical Apprenticeship Michigan: This is where it all begins. As an apprentice, you must be registered with the state and enrolled in a recognized training program, many of which use curricula like NCCER. You will work under the direct supervision of a licensed Journeyman or Master Electrician.
• Journeyman Electrician License Michigan: After accumulating 8,000 hours of documented work experience over a period of not less than four years, you can apply to take the journeyman exam. Passing this exam proves your competence as a professional residential electrician or commercial electrician, qualified to work under the general supervision of a Master.
• Master Electrician Requirements Michigan: To achieve the highest level of individual licensure, you must hold a journeyman license for at least two years and have a total of at least 12,000 hours of experience obtained over a period of not less than six years. This extensive electrical work experience verification allows you to sit for the master electrician exam. As a Master, you can plan, lay out, and supervise any electrical installation.

Pillar 1: Applying for Your Michigan Electrical Contractor License

Once you (or a full-time employee) hold a Master Electrician license, you can apply for the contractor license. This involves submitting an application to LARA’s Bureau of Construction Codes, paying the required fees, and passing the Electrical Contractor exam. This exam focuses more on law, regulations, and business practices than the technical aspects covered in the Master exam. The designated Master Electrician for the business can only be associated with one contractor license at a time.

Pillar 2: Establishing Your Business Structure

Beyond your trade license, you need to form a legal business entity. For many electricians, starting an LLC in Michigan for electricians is a popular choice because it offers personal liability protection, separating your personal assets from your business debts. This process involves:

• Filing “Articles of Organization” with LARA’s Corporations, Securities & Commercial Licensing Bureau. The standard filing fee is $50.
• Appointing a Registered Agent in Michigan.
• Obtaining an Employer Identification Number (EIN) from the IRS.
• Opening a dedicated business bank account to keep finances separate.

Pillar 3: Securing the Right Electrical Business Insurance

Protecting your new business is non-negotiable. The Michigan Department of Licensing and Regulatory Affairs (LARA) requires that all electrical contractors provide evidence of public liability insurance. While specific minimums are set by the state, obtaining comprehensive coverage is an essential business practice. Key policies include:

• General Liability Insurance: Protects against third-party claims of property damage or bodily injury.
• Workers’ Compensation: This is legally required in Michigan if you have employees. It covers medical expenses and lost wages for job-related injuries.
• Commercial Auto Insurance: A necessity if you use a van or truck for your business.
• Surety Bond for Contractors in Michigan: While not a universal requirement for an electrical license, some larger projects or municipalities may require you to secure a bond to guarantee your work and financial obligations.

Staying Compliant: The NEC and Continuing Education

Your responsibility as a business owner doesn’t end after you get your license. Staying current with code is mandatory. Michigan has adopted the 2023 National Electrical Code (NEC), which became effective on February 8, 2024. The adoption of a new code triggers a requirement for continuing education for electricians in Michigan.

The Michigan Electrical Administrative Board requires that Master and Journeyman electricians complete a 15-hour code update course within 12 months of the new code’s adoption. For the current cycle, this means you must complete your required online electrical courses by February 8, 2025. This training is vital for understanding critical updates that impact safety and installations. For example, knowing how to properly label switchgear, switchboards, and panelboards per NEC 2023 is a fundamental compliance task. Likewise, staying informed on how NFPA 70E 2024 updates have changed electrical job safety planning is crucial for protecting your team. Modern code also addresses new technologies, and understanding how the 2023 NEC handles load calculations with energy management systems can give your business a competitive edge. Ensure you are ready for your next renewal and fully compliant by completing your required training. ExpertCE offers a full suite of state-approved courses to meet these requirements; browse our courses today.

Building Your Legacy in the Great Lakes State

Starting an electrical business in Michigan is a challenging yet incredibly rewarding endeavor. By understanding the distinct roles of a Journeyman, Master, and Contractor, meticulously following the licensing path set by LARA, structuring your business legally, and committing to ongoing education, you can build a successful company that stands the test of time. Your technical skill got you here—now let your business acumen take you to the next level.