Florida Business and Finance Exam (Construction Contractors)

Florida Business and Finance Exam — Establishing the Contracting Business

Key Concepts

Business structures (Pages 1-8 to 1-12) - Sole proprietorship — owner has unlimited personal liability; business terminates on the owner's death; fringe benefits are not generally tax deductible (Page 1-8). - Partnership agreement should provide for: amount invested by each partner, division of profit or loss, distribution of assets on dissolution, duration, dispute settlement, restrictions of authority on expenditures, settlement in case of death or incapacitation, and key man life insurance (Page 1-9). - Limited partnership — a limited partner is immune from liability for partnership debts beyond the amount of his investment, but cannot be involved in management or day-to-day operations without risking loss of that immunity. A limited partnership must always have at least one general partner (Pages 1-9 to 1-10). - Joint venture — rights of the parties are governed substantially by the same rules that govern partnerships; generally a special partnership limited to a single job or transaction; a written joint venture agreement should be prepared (Page 1-10). - Corporation disadvantages: lack of centralized control, closely regulated, most expensive form to organize, extensive record keeping, potential double taxation (Page 1-11). Advantages include exemption of stockholders from personal liability, continuity of existence, and tax-deductible fringe benefits (Page 1-11). - S corporation requirements (Pages 1-11 to 1-12): domestic entity (incorporated anywhere in the U.S.); **only one class of…

Key Concepts

Payroll taxes (2025 Circular E, Pub. 15) - Social security tax is 6.2% each for employer and employee; the 2025 wage base limit is $176,100. Medicare is 1.45% each with no wage base limit (What's New / §9, pp. 3-135 to 3-136, 3-162). - Additional Medicare Tax: withhold 0.9% from wages paid to an employee in excess of $200,000 in a calendar year, beginning with the pay period in which wages exceed that amount. No employer matching share (§9, p. 3-162). - FUTA general test: subject to FUTA if you paid wages of $1,500 or more in any calendar quarter in the current or preceding year, or had one or more employees for some part of a day in 20 or more different weeks (§14, p. 3-176). FUTA applies to the first $7,000 of each employee's wages; with the maximum 5.4% state credit the rate is 0.6% (§14, p. 3-177). - FUTA deposits: if the quarterly liability is $500 or less, no deposit is required — carry it forward and add it to the next quarter's liability (§14, p. 3-177). - Deposit schedule: more than $50,000 reported in the lookback period = semiweekly depositor; $50,000 or less = monthly (§11, p. 3-165). Monthly: deposit by the 15th day of the following month. Semiweekly: Wednesday/Thursday/Friday paydays by the following Wednesday; Saturday–Tuesday paydays by the following Friday (§11, pp. 3-165 to 3-166).…

Key Concepts

Submittals and shop drawings (AIA A201-2017) - § 3.10.2 — The Contractor must submit a submittal schedule for the Architect's approval, coordinated with the construction schedule and allowing the Architect reasonable time to review. If the Contractor fails to submit a submittal schedule, or fails to provide submittals in accordance with the approved schedule, the Contractor is not entitled to any increase in Contract Sum or extension of Contract Time based on submittal review time. (Page 15) - § 3.12.8 — The Architect's approval of Shop Drawings, Product Data, Samples or similar submittals does not relieve the Contractor of responsibility for deviations from the Contract Documents unless the Contractor specifically notified the Architect of the deviation at the time of submittal AND (1) the Architect gave written approval of the specific deviation as a minor change in the Work, or (2) a Change Order or Construction Change Directive authorized the deviation. Approval also does not relieve the Contractor of responsibility for errors or omissions in submittals. (Page 16) - § 3.12.10.1 — Where professional design services or certifications by a design professional are specifically required of the Contractor, the Owner and Architect will specify all performance and design criteria that such services must satisfy; the Contractor may rely on their adequacy and accuracy, and must cause the services to be provided by an appropriately licensed design professional whose signature and…

Florida Business and Finance Exam (Construction Contractors)

Key Concepts

Deposit schedules and deposit rules (Circular E, Pub. 15, section 11) - Determine your schedule before each calendar year from the four-quarter lookback period: $50,000 or less reported = monthly schedule depositor; more than $50,000 = semiweekly schedule depositor (pp. 3-164 to 3-165). - Semiweekly: payments made Wednesday, Thursday, and/or Friday → deposit by the following Wednesday; Saturday through Tuesday → by the following Friday (pp. 3-165 to 3-166). - $100,000 Next-Day Deposit Rule: accumulating $100,000 or more on any day requires deposit by the next business day; a monthly depositor becomes a semiweekly depositor the next day and remains one for the rest of that calendar year and the following calendar year (p. 3-167). - Payment with return is allowed without penalty if total tax liability for the quarter is less than $2,500 and no $100,000 next-day obligation was incurred (p. 3-164).

Penalties - Failure-to-deposit: 2% (1–5 days late), 5% (6–15 days), 10% (16+ days, but before 10 days from the first IRS notice), 15% (unpaid more than 10 days after that notice) — p. 3-169. - Trust fund recovery penalty = 100% of the unpaid trust fund tax (section 11, p. 3-169). - Failure-to-file: 5% per whole or part month, generally capped at 25%; failure-to-pay 0.5% per month, also capped at 25% (section 12, p. 3-171). - Dishonored payment: **$25 or…

Key Concepts

Federal minimum wage and youth wages - Federal minimum wage is $7.25 an hour (FLSA §206(a)(1)(C), Page 5-73). The $5.85 and $6.55 figures in §206(a)(1)(A)–(B) were earlier phase-in steps, not the current rate. - An employer may pay an employee under 20 years of age not less than $4.25 an hour during the first 90 consecutive calendar days after initial employment (§206(g)(1), Page 5-76). No employer may displace employees (including reducing hours, wages or benefits) to hire at that wage (§206(g)(3)). - Tipped employees: employer claiming a tip credit must pay a cash wage of at least $2.13 per hour; if tips plus $2.13 do not equal the minimum hourly wage, the employer makes up the difference (29 U.S.C. §203(m)(2)(A); Page 5-143). - An enterprise that lost coverage after the dollar-volume increase must continue to pay not less than $3.35 an hour (Page 5-142).

Enterprise coverage — Requires BOTH employees engaged in commerce or handling goods/materials moved in commerce AND annual gross volume of sales made or business done of not less than $500,000 (exclusive of separately stated retail excise taxes) (29 U.S.C. §203(s)(1)(A), Page 5-70).

Key Concepts

Discipline, penalties and probation (Chapter 61G4-12, F.A.C.) - Unpaid fines accrue interest at an annual percentage rate of eighteen percent (18%), beginning the date immediately succeeding the due date — Rule 61G4-12.008(3), F.A.C. (p. 2-162). Civil penalties are due within 30 days of imposition unless the Board's Order specifies a later time — Rule 61G4-12.008(1). - Probable cause must be found by a unanimous vote of the appropriate panel; there are two panels of two members each (one Division I, one Division II) — Rule 61G4-12.010(1)-(2), F.A.C. (p. 2-164). - An unsatisfactory probation appearance automatically extends probation by six (6) months; if the Board authorizes a 7-hour Business Practices course in lieu of one unsatisfactory appearance, the licensee has 90 days to complete it or the appearance is deemed unsatisfactory — Rule 61G4-12.008(5)(d)-(e) (pp. 2-162 to 2-163). - Inactive licensure tolls probation; it resumes on reactivation and the licensee serves the remaining time — Rule 61G4-12.008(5)(f). - "Advertise" includes business cards, proposals, contracts, site signs, electronic media, "authorized dealer" listings and vehicle signs, but does not apply to balloons, pencils, pens, hats, clothing, shirts, or other promotional novelties — Rule 61G4-12.011(3) (p. 2-165). - Armed Forces spouse exemption: license stays inactive up to two renewal cycles, then the exemption must be renewed before expiration or the license reactivated, or it becomes delinquent — Rule 61G4-12.019 (p. 2-167).