Arkansas Contractor Business and Law Exam

Key Concepts

Sole Proprietorships (Chapter 2 — Sole Proprietorships) - Simplest ownership form; the owner owns the assets, bears personal liability for all actions undertaken in the name of the business, and the business terminates upon the owner's death. - If the business operates under a name different than the owner's own, a fictitious name certificate (DBA) typically must be filed at a local or state government office. It does not create a separate legal entity or limited liability. - Advantages: minimal legal restrictions, simple ownership form, low startup costs, sole ownership of profits, freedom in decision-making.

Arkansas Contractor Business and Law Exam Source: NASCLA Contractors Guide to Business, Law and Project Management – Arkansas, 8th Edition, Chapter 8: Contract Management (pages 8-1 through 8-11)

Key Concepts

Required Contract Elements (Ch. 8, Required Contract Elements, p. 8-1). Four key elements must be in effect to make a contract binding: offer and acceptance, consideration, competent parties, and legal purpose. - Offer and acceptance — An offer outlines the work and compensation. Acceptance is generally made by signing the offer; a counteroffer is not acceptance. An offer's acceptance window is typically 30 days, but it should be stated in the offer; if no deadline is stated, it expires in a "reasonable time," which is up to court interpretation.…

Arkansas Contractor Business and Law Exam

Key Concepts

ADEQ program areas (Chapter 12 — Arkansas Department of Environmental Quality section) - Proactive Programs help communities and businesses develop recycling programs and provide small businesses and communities with assistance on environmental compliance and pollution prevention. - Regulatory Programs handle permitting, monitoring and enforcement for air, hazardous waste, solid waste and water. - Educational Services trains and licenses environmental professionals and conducts workshops.

Environmental law reach (Chapter 12 — Environmental Law section) - NEPA applies to a construction project only if it is considered a "federal action," ensuring federal agencies weigh environmental impacts in planning and decision making. - The Clean Water Act (stormwater discharge/NPDES), Clean Air Act (pollutant limits) and…

Key Concepts

Bid documents (Page 7-1). A competitive bid package often includes an invitation to bid (overview, deadlines, general requirements), bid instructions, bid forms (bid sheet, bid schedule, bidder's questionnaire, copy of the contract), and supplements (e.g., property survey, soil analysis). A bidder can be found unresponsive if information is incorrectly submitted or omitted altogether. If changes are made to a bid package before it is due, an addendum is issued; it becomes part of the bid documents and ultimately part of the contract when awarded.

NASCLA Contractors Guide to Business, Law and Project Management — Arkansas, 8th Edition · Chapter 14: Financial Management

Key Concepts

Bookkeeping. Bookkeeping is the first step in the accounting process and involves the accurate recording of all financial transactions; financial statements are derived from this information. Keep business and personal finances separate, record expenses when they occur, avoid paying with cash so you have a "paper trail," balance the checking account monthly, and keep all financial records for the required amount of time as designated by the IRS. (Financial Management chapter — Bookkeeping, p. 203)

Key Concepts

Arkansas workers' compensation (Ark. Code Ann. § 11-9-401 et seq. — Managing Risk chapter, Arkansas Coverage Requirements) - Employers engaged in building or building repair work with two or more employees must carry coverage. - A contractor who subcontracts and has one or more employees must carry coverage; a subcontractor with one or more employees must carry coverage. - Proof of current coverage must be given to the Arkansas Contractors Licensing Board to obtain or renew a Residential License; for a Commercial License, proof is required if you have one or more employees. - A contractor who sublets part of contract work may be liable for coverage for the subcontractor's employees if the subcontractor has not obtained…

Key Concepts

Arkansas new hire reporting — deadlines

• You must report all new employees to the Arkansas New Hire Reporting Program no later than 20 days from the date of hire, rehire, or recall (Chapter 11, Employee Management — New Hire Reporting, Reporting Requirements, p. 11-2).
• Employers who submit reports magnetically or electronically must submit the reports in two monthly transmissions not more than sixteen (16) days apart — a maximum spacing, not a reporting deadline (same section).

Reporting methods (p. 11-2): Internet (online data entry form or secure file upload at www.ar-newhire.com); diskette, magnetic tape or cartridge mailed to the Arkansas New Hire Reporting Center, P.O. Box 2540, Little Rock, Arkansas 72203 (1-800-259-2095 or (501) 376-2125);…

Arkansas Contractor Business and Law Exam All material from the NASCLA Contractors Guide, Chapter 9: Scheduling and Project Management

Key Concepts

Scheduling Process (Scheduling Process section, pp. 9-1 to 9-2) - Planning lets you visualize the project and anticipate conflicts. Project start and completion dates are outlined in the contract; the scheduler fits all necessary tasks within that time frame. - Sequence of tasks: Some tasks run at the same time; others must precede the next. Example given: interior and exterior paint may be applied at the same time, but drywall must be completed before paint is applied. - Activity duration depends on three factors: size of the project, labor hours estimated, and length of time dedicated to the…

Key Concepts

Who must keep records (size) — If your company had ten (10) or fewer employees at all times during the last calendar year, you do not need to keep OSHA injury and illness records unless OSHA or BLS informs you in writing under § 1904.41 or § 1904.42 (§ 1904.1(a)(1)). If the company had more than ten (10) employees at any time during the last calendar year, you must keep records unless the establishment is partially exempt under § 1904.2 (§ 1904.1(a)(2)). The size exemption is based on the entire company's peak employment during the last calendar year (§ 1904.1(b)(1)–(b)(2)).

Subtopics: Arkansas state tax specifics — withholding, corporation, partnership, and S corporation filing requirements (plus the federal tax basics the chapter builds on)

Key Concepts

Employer Identification Number (EIN) — Tax Basics, Employer Identification Number section (Page 217) - The EIN is a 9-digit number issued by the IRS, arranged 00-0000000, used to identify tax accounts of employers and certain others who have no employees. - Obtain it by calling the Business and Specialty Tax Line at 1-800-829-4933, faxing Form SS-4, mailing Form SS-4, or applying online at www.irs.gov. - The only entities that do not need an EIN are sole proprietorships with no employees that file no excise or pension tax returns, and single-owner LLCs (where the owner…

Key Concepts

Who may claim a lien. Every contractor, subcontractor, or material supplier who supplies labor, services, material, fixtures, engines, boilers, or machinery in the construction or repair of an improvement to real estate — or to any boat or vessel of any kind — has a lien upon the improvement and on up to one (1) acre of land on which the improvement sits, or to the extent of any number of acres on which work was done (A.C.A. § 18-44-101(a)–(b)). Soil or drain pipe/tile: a lien for each tract of forty (40) acres or less on which the tile is placed (§ 18-44-104(a)). Architects, engineers, surveyors, appraisers, landscapers, abstractors, and title insurance agents have lien rights only…

Key Concepts

Commercial thresholds and definitions - A commercial contractor's license is required when the cost of work in Arkansas, including labor and materials, is $50,000 or more, excepting single-family residences (§ 17-25-101(a)(1)). Splitting work into separate contracts of less than $50,000 to circumvent the chapter is prohibited (§ 17-25-101(b)). - Acting as a contractor on your own or its own property requires no license, but you must comply with all other provisions of the chapter (§ 17-25-101(a)(2)); "its own property" means the sole and exclusive right to sell or convey (Rule 224-25-12(a)). - "Owner" = a person who owns property or is a lessee of property (§ 17-25-101(e)); "prime contractor" contracts directly with the owner (§ 17-25-101(g)). -…