Louisiana Contractor's License Flashcards

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Questions and Answers

What does a cover page contain?

Contact info and a confidentiality statement.

What is required for an Abatement/Mold Remediation License?

A 4 hour course in unfair trade practices and consumer protection law.

How long does an employer have to fulfill a W2 request after final wages are paid?

30 days.

By what date must OSHA's annual summary of injuries and illnesses be posted?

<p>No later than February 1st of each year.</p> Signup and view all the answers

For how long must OSHA Form 300 be kept?

<p>5 years.</p> Signup and view all the answers

Who requires Occupational License Taxes?

<p>Cities and parishes.</p> Signup and view all the answers

What does an executive summary include?

<p>Highlights of the business plan.</p> Signup and view all the answers

What is defined in the company summary?

<p>Company vision, mission, legal structure, management personnel, business location, and facilities.</p> Signup and view all the answers

What information is contained in the products and services section?

<p>Specific products, primary subcontractors and suppliers, and expansion opportunities.</p> Signup and view all the answers

What elements are defined in a market analysis?

<p>Target market, trends, and major competitors.</p> Signup and view all the answers

What does a financial plan include?

<p>Financial statements, balance sheet, income statement, and cash flow statement.</p> Signup and view all the answers

What type of business is a sole proprietorship?

<p>A business owned and managed by a single individual.</p> Signup and view all the answers

What is a partnership?

<p>A business in which two or more persons combine their assets and skills.</p> Signup and view all the answers

What is a Limited Liability Corporation?

<p>A type of business with limited liability for the owners, not paying corporate income tax.</p> Signup and view all the answers

What is a C Corporation?

<p>The most common type of corporation, offering limited liability to its owners.</p> Signup and view all the answers

What defines an S Corporation?

<p>A form of corporation that avoids double taxation by passing income through to shareholders.</p> Signup and view all the answers

What is a joint venture?

<p>An agreement between two or more companies to share a business project.</p> Signup and view all the answers

What purpose does a business license serve?

<p>Protects the public from unqualified, inexperienced, incompetent, or unethical contractors.</p> Signup and view all the answers

What are licensing authorities responsible for?

<p>Conducting investigations and disciplining problem contractors.</p> Signup and view all the answers

How many members are appointed to the Louisiana Licensing Board?

<p>15 members.</p> Signup and view all the answers

When is a license required for a commercial contract?

<p>$50,000 or more.</p> Signup and view all the answers

What is the threshold for an electrical and/or mechanical contract?

<p>$10,000 or more.</p> Signup and view all the answers

What is the license requirement for a residential contract?

<p>$75,000 or more.</p> Signup and view all the answers

What is the minimum for an abatement contract?

<p>$1 or more.</p> Signup and view all the answers

What is the license requirement for a home remodel contract?

<p>$7,500 or more.</p> Signup and view all the answers

What defines a commercial project?

<p>Any project other than residential.</p> Signup and view all the answers

What makes multi-resident contracts considered commercial?

<p>If in the same subdivision.</p> Signup and view all the answers

Who is exempt from licensing?

<p>Property owners building for their own use, donated labor, public utilities, equipment repair, and mobile home builders.</p> Signup and view all the answers

What are the penalties for working without a business license?

<p>$500 per day of the violation, up to 3 months in jail, or both.</p> Signup and view all the answers

Who is the qualifying party?

<p>The person who will hold the business license.</p> Signup and view all the answers

What is the time limit to notify the board about a termination of a qualifying party?

<p>30 days.</p> Signup and view all the answers

How long do you have to replace a qualifying party?

<p>60 days.</p> Signup and view all the answers

When must licensing renewals be submitted?

<p>30 days prior to the anniversary date they were issued.</p> Signup and view all the answers

What is the role of insurance in business?

<p>Supplements your risk management program and is sometimes required by law.</p> Signup and view all the answers

What does property insurance cover?

<p>Damage to property, theft, or loss.</p> Signup and view all the answers

What does liability insurance provide?

<p>Protection from claims arising from injuries or damage to other people or property.</p> Signup and view all the answers

What is included in Business Owner's Insurance?

<p>Property and liability insurance that has been bundled together.</p> Signup and view all the answers

What does burglary and theft insurance cover?

<p>Loss from larceny, robbery, forgery, fraud, and vandalism.</p> Signup and view all the answers

What is Key Man Life Insurance?

<p>Life insurance applied for, owned, and payable to a business on the life of a key individual.</p> Signup and view all the answers

What do bonds provide?

<p>Protection when contractual obligations are not met.</p> Signup and view all the answers

What does bond language include?

<p>Total dollar amount, length of term, requirements for defect, and enforcement.</p> Signup and view all the answers

What is time management in business?

<p>Gives you a competitive edge and helps anticipate problems.</p> Signup and view all the answers

What is the purpose of delegation?

<p>Increases efficiency and helps develop employees.</p> Signup and view all the answers

What does business ethics protect?

<p>Your reputation and helps avoid litigation.</p> Signup and view all the answers

What role does technology play in business?

<p>An essential tool for communicating and keeping your business competitive.</p> Signup and view all the answers

What are examples of marketing tools?

<p>Logos, stationery, and business cards.</p> Signup and view all the answers

What is involved in estimate planning?

<p>Careful review of construction documents and site visit.</p> Signup and view all the answers

What do bid documents include?

<p>An invitation, instructions, required forms, and supplemental information.</p> Signup and view all the answers

What is bid shopping?

<p>Revealing the sub-bid of one subcontractor to obtain a lower price from another.</p> Signup and view all the answers

What is bid peddling?

<p>The effort to determine the relative standing of a quoted bid to submit a revised bid lower than the original.</p> Signup and view all the answers

What is bid rigging?

<p>An illegal practice where firms agree in advance who will submit the lowest bid.</p> Signup and view all the answers

What does estimating framework include?

<p>Project phases with the labor and materials needed for each phase.</p> Signup and view all the answers

What is a quantity takeoff?

<p>Provides the most accurate basis for estimating project costs.</p> Signup and view all the answers

What is the purpose of job cost recording?

<p>Monitors current projects, provides reports, and helps create accurate future estimates.</p> Signup and view all the answers

What is a contract?

<p>A legally binding agreement between two or more parties.</p> Signup and view all the answers

What do offer and acceptance outline?

<p>The obligations of a contract and an agreement on terms.</p> Signup and view all the answers

What is consideration in contract law?

<p>Something of value exchanged for something else of value.</p> Signup and view all the answers

Who are competent parties?

<p>Those who are legally capable of entering into contracts and are of sound mind.</p> Signup and view all the answers

What is the legal purpose of a contract?

<p>A clause stating a contract must be legal and not against public policy.</p> Signup and view all the answers

What do contact provisions include?

<p>Payment and terms, obligations of the parties, supplemental conditions, and breach requirements.</p> Signup and view all the answers

What are price and payment terms?

<p>Specifies lump sum, unit price or cost-plus method and includes all expected fees.</p> Signup and view all the answers

What are progress payments?

<p>Ensures the contractor follows a planned schedule and pays for labor and materials as they occur.</p> Signup and view all the answers

What is retainage?

<p>A percentage of money owed to the contractor that is held back to encourage project completion.</p> Signup and view all the answers

What are contract conditions?

<p>Obligations the parties must meet for the agreement to be valid.</p> Signup and view all the answers

What are supplemental conditions?

<p>Often prepared in a separate document and tailored to each project.</p> Signup and view all the answers

What is a breach of contract?

<p>Occurs when a party fails to perform according to the terms.</p> Signup and view all the answers

What is a material breach?

<p>A serious violation of a contract that may void it and lead to litigation.</p> Signup and view all the answers

What is an immaterial or partial breach?

<p>A less serious violation that does not normally result in contract termination.</p> Signup and view all the answers

What are liquidated damages?

<p>Damages that parties agree in advance should be paid if the contract is breached.</p> Signup and view all the answers

What are boilerplate provisions?

<p>Standard language or clauses used in contracts, often referred to as miscellaneous clauses.</p> Signup and view all the answers

What is force majeure?

<p>A provision that excuses a party from liability due to unforeseen events.</p> Signup and view all the answers

What does indemnification do?

<p>Absolves a specific party from any payment for losses incurred by a third party.</p> Signup and view all the answers

What does a warranty define?

<p>The contractor's responsibility for the repair of defects after project completion.</p> Signup and view all the answers

What do delays and extensions provide?

<p>A contingency in case the completion deadline is not met.</p> Signup and view all the answers

What does schedule acceleration entail?

<p>Assignments of cost incurred to complete a project ahead of schedule.</p> Signup and view all the answers

What is an artistic changes clause?

<p>Limits the number of changes that can be made to a project.</p> Signup and view all the answers

What are recitals in contracts?

<p>Preliminary clauses identifying the intent or purpose of the agreement.</p> Signup and view all the answers

What is a lump sum contract?

<p>A contract with a fixed total price for a well-defined product or service.</p> Signup and view all the answers

What is a unit price contract?

<p>A contract where payment is based on the contractor's quoted price per unit.</p> Signup and view all the answers

What is a cost-plus contract?

<p>A contract reimbursing the contractor for specified incurred costs, plus overhead.</p> Signup and view all the answers

What is a single prime contract?

<p>The traditional form of contracting where the owner hires an architect and contractor.</p> Signup and view all the answers

What is design/build contracting?

<p>The owner contracts with one entity to provide both design and construction services.</p> Signup and view all the answers

What does a construction manager do?

<p>Coordinates the construction process on behalf of the owner.</p> Signup and view all the answers

What is turnkey contracting?

<p>Includes obtaining financing and land for the project alongside construction.</p> Signup and view all the answers

What is fast-track construction?

<p>Construction begins before design and specifications are complete.</p> Signup and view all the answers

What are multiple prime contracts?

<p>Separate contractors contracting directly with the owner for specific project elements.</p> Signup and view all the answers

What is partnering in construction?

<p>Sets common goals for all parties involved to increase communication and reduce claims.</p> Signup and view all the answers

Where can standard forms for contracts be obtained?

<p>From the American Institute of Architects and Associated General Contractors.</p> Signup and view all the answers

What is a change order?

<p>A written agreement to modify the contract.</p> Signup and view all the answers

What are addenda in construction contracts?

<p>Modifications made to project plans or specifications prior to contract award.</p> Signup and view all the answers

What is negotiation in a business context?

<p>An unstructured discussion designed to resolve disputes.</p> Signup and view all the answers

What is mediation?

<p>Involves a neutral third party to help resolve disputes.</p> Signup and view all the answers

What is arbitration?

<p>A third party acts as a judge to render a legally binding decision.</p> Signup and view all the answers

What is a project manual?

<p>The central location for bid documents, provisions, specifications, and addenda.</p> Signup and view all the answers

What is an oral agreement?

<p>Legally binding but harder to prove in disputes.</p> Signup and view all the answers

What is legal interpretation in contracts?

<p>Clarity of language and meaning to avoid disputes.</p> Signup and view all the answers

What is a substitution in contracting?

<p>Formally requesting new products if the original are discontinued or for savings.</p> Signup and view all the answers

What is a subcontractor?

<p>Company hired by a general contractor for a specific portion of the project.</p> Signup and view all the answers

What is the sequence of tasks?

<p>Critical for scheduling subcontractors and ordering materials.</p> Signup and view all the answers

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Study Notes

Louisiana Contractor's License Overview

  • Cover Page: Contains contact information and a confidentiality statement.
  • Abatement/Mold Remediation License: Requires a 4-hour course on unfair trade practices and consumer protection law.
  • W2 Requests: Employers have 30 days to fulfill employee requests for W2 forms after final wages are paid.

OSHA Requirements

  • Annual Summary: Employers must post the annual summary of injuries and illnesses by February 1st each year.
  • OSHA Form 300: Must be kept for 5 years relating to the incidents it covers.

Licensing & Business Structures

  • Occupational License Taxes: Required by cities and parishes.
  • Business Structures:
    • Sole Proprietorship: Owned and managed by one individual.
    • Partnership: Involves two or more persons combining assets and skills.
    • Limited Liability Corporation: Owners have limited liability and avoid corporate income tax.
    • C Corporation: Common type of corporation providing limited liability to owners.
    • S Corporation: Avoids double taxation by passing income and credits to shareholders.
    • Joint Venture: Agreement between companies to share a business project.

Contractor Licensing

  • Licenses Required:
    • Commercial Contract: Required for projects of $50,000 or more.
    • Electrical/Mechanical Contract: Required for contracts of $10,000 or more.
    • Residential Contract: Required for projects of $75,000 or more.
    • Home Remodel Contract: Required for projects of $7,500 or more.

Penalties and Notifications

  • Penalties for Operating Without License: $500 per day, up to 3 months jail, or both.
  • Notification to Board: 30 days to notify about terminating a qualifying party; 60 days to replace.

Business Insurance Types

  • Property Insurance: Covers damage, theft, or loss.
  • Liability Insurance: Protects against claims from injuries or damages.
  • Business Owner's Insurance: Bundled property and liability insurance.
  • Key Man Life Insurance: Covers a key individual's life for business protection.

Contract Essentials

  • Contract Definition: Legally binding agreement between parties.
  • Important Contract Elements:
    • Offer and Acceptance: Outlines obligations and agreement on terms.
    • Consideration: Value exchanged, typically money for services.
    • Breach of Contract: Failure to perform according to terms.
    • Liquidated Damages: Pre-agreed compensation for contract breaches.
  • Contract Types:
    • Lump Sum Contract: Fixed total for a well-defined service.
    • Unit Price Contract: Payment based on quoted price per work unit.
    • Cost-Plus Contract: Contractor reimbursed for costs plus additional for profit.

Dispute Resolution

  • Negotiation: Informal discussion aimed at resolving disputes.
  • Mediation: Third party helps resolve disputes.
  • Arbitration: Involves a third party acting as a judge to render a binding decision.

Project Management Concepts

  • Time Management: Essential for competitive edge and problem anticipation.
  • Delegation: Increases efficiency and develops employees.
  • Change Order: Modifies the original contract by mutual agreement.

Estimation and Bidding

  • Estimate Planning: Initial steps involve document review and site visit.
  • Bid Documents: Include invitations, instructions, and required forms.
  • Bid Shopping, Peddling, and Rigging: Unethical practices in securing bids.

Additional Considerations

  • Indemnification: Protects a party from third-party losses or damages.
  • Supplemental Conditions: Tailored provisions specific to each project.
  • Schedule Acceleration: Involves cost assignments to expedite project completion.

Key Terms in Contracting

  • Recitals: Preliminary clauses stating the agreement's intent.
  • Breach Types: Material breach involves significant violation; immaterial breach is less serious.
  • Warranty: Contractor's obligation for defect repairs after project completion.

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