Business Law and Project Management Notes

Topics: Employment, Lien, Contract Pages: 16 (3207 words) Published: January 23, 2013
Chapter 1
The Contracting Business
Business Fail
Poor Planning and management
Poor sales, high operating expenses, no invoice collection, too many fixed assets, inventory problems, poor location, fraud Business Plan
Planning Tool
Loan or Investor Document
Benchmaking Tool
Cover page, executive summary, company summary, products/services, market analysis, marketing strategy, financial plan Pitfalls
Realistic Assumptions
Simple Language
Risks as well as opportunities
Analyze Competition

Chapter 2

Business Structure
C Corp : Stockholders have limited liability, tax on profit, BOD and corporate officers, limit on activities, double taxation

S Corp: Pass through income/loss/deductions to shareholders, limited to <75 shareholders

LLC: Does not protect personal actions from liability, taxes paid on distributed income, no public disclosure of finances, taxed as a (1)sole proprietor or (>1) partnership

Chapter 3

Va Board for Contractors
13 members: 9 contractors, 1 material salesman, 1 official, 2 citizens License and Class Specialty:
A$120-$750k/yr with >$45,000 net worth
B$7,500-$120k/project or >$150k/yr with $15,000 net worth
C$1,000-$7,000/project or <$150k/yr with no net worth requirement All landscape Irrigation and Water Well contractors must be licensed as well as:
Highway/Heavy, Electrical, Plumbing, HVAC
License expires in 2 years. New form and fees to renew

Must include: Start Date, Estimated Completion Date, Cost and Payment Schedule, Materials, Plain Language Exculpatory Clause, Statement of Assurance of Compliance, Disclosure of Cancellation Rights, Name, Address, Class, License #, Statement explaining Change Orders and Signed by ALL Parties

Va Contractor Transaction Recovery Fund
Established for Homeowners that suffered reimbursable loss by incompetent or dishonest licensed GC. Limit $20k/claimant or $40k/contractor. ($25 fee in license application goes to the fund)

Chapter 4
Managing Risk
Risk management
A good program Lowers Insurance Premiums
Mitigated through Insurance and Bonding
Required Coverage
Workers Comp, Unemployment, Vehicle, Business and Personal Property, as well as…. All Risk Builders Risk
For Owners and Builders for buildings under construction. Covers:
Poor workmanship, faulty design (Tools are NOT covered)
Construction MUST be started
Includes subrogation or waiver to sue one another
Named Peril Builders Risk
Inland Marine Theft
Equipment Floater
Protects against 3rd party claims of negligence resulting in bodily harm or property damage
Commercial General Liability: should be supplemented with an Umbrella policy Burglary and Theft Insurance
Employer Related Insurance
Purchased by employer- may not be deducted from paycheck.
Workers Compensation- Required for >3 employees
Unemployment- Employers MUST pay Fed and State taxes if
Fed: Wages >$1,500 in any quarter
Employed least 1 employee during any day of the week during 20 weeks
VA:Must register with Va Employment Commission if
Business acquired a business subject to the tax
Business is subject to Fed tax
Entity is a Sate, Local Gov or Political Entity
Surety Bond
3 party agreement. Binds contractor. Surety assumes contractors responsibility to ensure project completion. If it is required for Public Projects it is a Statutory Bond.
Common Law Bond
Agreement between Owner and GC
Bid Bond
Guarantees contractor will perform the job for submitted price
Performance Bond
Ensures contractor will complete job
Payment Bond
Guarantees subs and suppliers will get paid
Maintenance Bond
Guarantees NO defective workmanship or material will be used on the job
Completion Bond
Provides assurance to financial backers of project
Fidelity Bond
Covers business owners for losses due to employee theft
Lien Bond
Guarantees that liens cannot...
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