What are some of the differences between a licensed contractor and a non-licensed contractor?

I am looking for a contractor to renovate and update my old house. I have already received 4 job bids ranging from $9,000 to $15,000 from both licensed and non-licensed contractors. The project does not affect the structural or changing the floor plan of the house, but the work does include replacing exiting kitchen cabinets and appliances, replacing existing tiled shower stalls, replacing vinyl floors with ceramic tiled floors in kitchen and baths areas, replacing plumbing and electrical fixtures that includes light electrical and plumbing work such as adding a light switch and adding a dishwasher. A friend has told me that non-licensed contractors can only bid on jobs costing less than $1,000 where as licensed contractors are bonded and able to legally bid on jobs costing more than $1,000. Does anyone know the facts between a licensed and non-licensed contractor besides the fact that one has and one does not have a license? Thank you.