NASCLA Contractors Guide to Business, Law, and Project Management Exam Guide Graded A 2024

Elements of a Business Plan Cover Page, Executive Summary, Company Summary, Products & Services, Market Analysis, Marketing Strategy, and Financial Plan Sole Proprietorships Adv: Min legal restrictions, simple ownership form, low startup costs, sole ownership of profits, freedom in decision making process. Disadv: Unlimited personal liability, less available capital, possible difficulty in obtaining long-term financing, dissolution of the business in the event of the owner's death. *SOLE PROPRIETORSHIP THE EASIEST TO SET UP Partnerships -Can be formed through an oral agreement. -General Partners own the assets of the company. -Limited partnership consists of one or more general partners and one or more limited partners. -Limited partners have limited liability in the company. -If a general partner leaves the company, the partnership dissolves -All owners in a general partnership have personal and unlimited liability for all actions undertaken in the name of the business, including all debts -Limited Partners have no personal liability for the business. *GENERAL PARNERSHIPS EXIST AS LONG AS PARTNERS REMAIN *EACH PARTNER IS TOTALLY LIABLE FOR ACTS IN THE PARTNERSHIP C Corporations -Incorporation gives your business a legal existence that goes beyond the life of its shareholders die. -The owners of the corp - known as stockholders - are not personally liable for the losses of the business. S Corporations -Can avoid double federal taxation by electing to be treated as an S Corp -S Corp passes its items of income, loss, deduction, and credits through to its shareholders to be included on their separate returns. Limited Liability Corporation (LLC) -Shares characteristics of both sole proprietorship and corporate identities - Ownership in the LLC is invested in memberships rather than shares of stock -Offers some protection from liability for actions taken by your company, but does not protect from liability for personal actions. -Like an S Corp, federal income taxes are paid only on income distributed to members as ordinary income. An LLC with more than 1 owner may elect to be taxed as a partnership or as a corporate entity. NC Licensing Board for General Contractors LICENSING BOARD TO PROTECT THE PUBLIC Commercial General Liability (CGL) CGL Insurance offers basic liability coverage. Covers 4 types of injuries: 1. bodily injury for individuals who are NOT employees 2. damage or loss to property NOT belonging to the business 3. personal injury, including slander or damage to rep 4. advertising injury Business Owner's Policies (BOPs) BOPs bundle property and liability coverage together. Can eliminate gaps between separate property and liability policies. Workers' Compensation Insurance Provides coverage for employees for are injured on the job. Purchased by the employer...no part of it should be paid by the employee. Certificate of Insurance A certificate of insurance (COI) is issued by an insurance company or broker. The COI verifies the existence of an insurance policy and summarizes the key aspects and conditions of the policy. When hiring subs, you should verify their insurance coverage to ensure it is adequate enough to cover any lability arising from their work. PARTIES OF A BOND AGREEMENT A surety bond is a risk transfer mechanism between a surety, the contractor, and the project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor cannot perform the task, the surety assumes the contractor's responsibilities and ensures that the project is completed.