Idaho Electrical Contractor / Limited Electrical Contractor Exam

Key Concepts

What a business plan is — "A business plan is a written document describing the nature of the business, the sales and marketing strategy, the financial background, and containing a projected profit and loss statement." A business plan continually changes and shows you where you've been and where you want to go. (Section 1: Business Plan Outline, "What is a Business Plan?" — Page 10)

Plan style — The best business plans are brief and to the point. "Lenders often make financing decisions within 15 minutes of reading a loan application, so the first impression is important." Use bullet items instead of paragraphs where possible. (Page 10)

Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual (Idaho) — Section 2, Pages 13–15

Key Concepts

Why the section exists. "Contracting with competent business service professionals can mean the difference between success and failure for many new businesses." (Section 2: Developing Professional Relationships, Page 13)

Selecting an Accountant (Section 2 – Selecting an Accountant, Page 13) - The Idaho State Board of Accountancy licenses and regulates Certified Public Accountants (CPA) and Licensed Public Accountants (LPA) — those are the two categories under the Board's jurisdiction. - CPAs and LPAs "act as advisors to individuals and businesses on a wide range of financial related matters" and provide **audit, review and compilation services, tax assistance, management advisory…

Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual — prepared to help you prepare for the various Contractors' Exams required by Idaho

Key Concepts

The six recognized forms (Page 16). "In Idaho, a business may operate as a Sole Proprietorship, a General Partnership, a Limited Liability Partnership, a Limited Partnership, a Limited Liability Company or a Corporation." No other form is listed. For legal description, the manual points to Idaho Statutes, Title 53 Partnership. Each form has significant tax and legal consequences, and a qualified tax and/or legal advisor should be consulted.

Sole Proprietor (Page 16). "A business owned and controlled by one person who is solely liable for its obligations."

Exam: Idaho Contractors' Exams (as referenced in the manual)

Source: Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual, Section 4: Licensing Information, Pages 20–21

Key Concepts

DOPL's mission (Section 4, "Mission," Page 20) The mission of the Division of Occupational and Professional Licenses (DOPL) is to safeguard the citizens of Idaho through responsible administration of building and construction-related safety and licensure standards while promoting a positive business climate. Note that the mission statement contains two components: safeguarding citizens and promoting a positive business climate.

Seven regulatory boards (Section 4, "Mission," Page 20) DOPL is host to seven regulatory boards within the Executive Office of the Governor:

Contractor's Business and Law Reference Manual (Idaho), Section 5: Accounting & Finance

Key Concepts

Financial management and bookkeeping (Section 5, Financial Management, Page 22; Bookkeeping, Pages 22–23) - The financial manager is normally the owner/contractor. Responsibilities: making financial decisions, managing cash flow, managing cost and profits, and accounting for financial resources. - Bookkeeping process order: business transaction (debit or credit) → journal entry → general ledger → trial balance → financial statements. - At the end of an accounting period all journal entries are totaled and transferred to the general ledger; this is called "posting." - A trial balance is the act of totaling debit balances and credit balances to confirm that total debits equal total credits.

Key Concepts

Federal anti-discrimination laws - ADEA protects people 40 or older and applies to employers of 20 or more employees, only in industries affecting interstate commerce (Section 6 — ADEA). It is not illegal to favor an older worker over a younger one, even if both are 40+ (Section 6 — ADEA, Age Discrimination). A neutral policy applying to everyone can still be illegal if it negatively impacts those 40+ and is not based on a reasonable factor other than age (Section 6 — ADEA, Employment Policies/Practices). - ADA generally applies to employers having 15 or more workers (Section 6 — ADA). Disability can be shown three ways: a condition substantially limiting a major life activity, a history…

Key Concepts

Types of insurance (Section 7: Insurance, pp. 65–66) - Builder's risk covers damage to the work itself while the project is under construction; it can be obtained by the owner or the contractor, insures any physical improvements (not just structures), and typically covers loss of or damage to materials intended for use in the project. All-risk is the most common type; named-peril protects only against losses from specifically named items in the policy. - Commercial general liability protects against third-party bodily injury or property damage claims arising from the construction; completed operations (errors and omissions) covers injuries or property damage to third parties resulting from the contractor completing an operation. - Contractors pollution liability covers environmental claims…

Key Concepts

Bids and bid types (Bidding section, Page 79) - A bid is "a formal offer to provide services and/or items within a specified time for a specific price." - Public works construction uses two types of bids: open and closed. - An open bid (also called a hard bid) is the most common type of competitive bidding; all competitors use the same proposal form provided with the bidding documents. The price quoted in the offer is final, no adjustments allowed, and open bids are opened and read publicly — leaving no room for negotiation. - A closed bid has no standardized form, is not read publicly, and lets contractors submit other documentation with the offer. The project…

Key Concepts

Essential elements of a legally valid contract (Page 84). A contract is an agreement between two or more parties creating specified obligations enforceable by law. It must contain: - Offer and Acceptance — a clear or definite offer and an unqualified acceptance. - Consideration — each party has to promise or provide something of value to the other. - Parties — anyone entering a contract must be an adult of sound mind; the contract shall state all parties, including names and addresses (if applicable). - Mutuality of Obligation — a "Meeting of the Minds": mutual understanding and assent; the parties must agree to the same thing, in the same sense, at the same time. - **Legal Purpose…

Division of Occupational & Professional Licenses Contractor's Business and Law Reference Manual — Section 10

Key Concepts

The five phases (Page 88). The manual numbers the steps of project management: (1) initiation & estimating, (2) planning, (3) monitoring & controlling, (4) executing, (5) closing. Note that this list places monitoring & controlling before executing. Project management is "the discipline of planning, organizing, securing, and managing resources to achieve specific goals"; a project is temporary with a defined beginning and end, in contrast to operations (Page 88).

Initiation and estimating (Page 89). The initiation plan must cover: analyzing business needs/requirements in measurable goals; reviewing current operations; financial analysis of the costs and benefits including a budget; stakeholder analysis (a stakeholder…

Key Concepts

Poster and Form 300 display (Section 11, p. 100, Workplace Poster Requirements for Small Business and Other Employers) - All employers, regardless of number of employees, must exhibit the OSHA poster "Job Safety and Health, IT'S THE LAW!" where visible to all employees. - Employers with 11 or more employees must also exhibit OSHA Form 300, Log of Work-Related Injuries and Illnesses. - Failure to display the required poster and Form 300 (if applicable) carries a penalty of $1,000 for each violation. - A repeat serious violation fine may currently exceed $150,000 per repeat violation.

Key Concepts

Income tax filing by entity type (Section 12, "Income Taxes," Page 144) - Sole proprietor: files IRS Form 1040 with Schedule C and Schedule SE (self-employment Social Security taxes); state: Idaho Form 40 (Form 43 for part-year/nonresidents) with a copy of the federal return. Estimated payments on Form 1040ES if tax owed for the year will exceed $1,000; Idaho does not require individual estimates, but voluntary payments may be made on Idaho Form 51. - General partnerships: IRS Form 1065 and Idaho Form 65; tax generally paid on the partners' returns. Limited partnerships and LLPs are treated the same as general partnerships. - S corporations: elect with IRS Form 2553; report on Form 1120S with Idaho **Form…

Contractor's Business and Law Reference Manual, Section 13 (Pages 158–167)

Key Concepts

Who has lien rights (Idaho Code 45-501, p. 158) - Every person performing labor upon, or furnishing materials to be used in, the construction, alteration or repair of any mining claim, building, wharf, bridge, ditch, dike, flume, tunnel, fence, machinery, railroad, wagon road, aqueduct, or any other structure — or who grades, fills in, levels, surfaces or otherwise improves any land — has a lien. - Professional engineers and licensed surveyors under contract who prepare or furnish designs, plans, plats, maps, specifications, drawings, surveys, estimates of cost, on-site observation or supervision, or render any other professional service in connection with any land or building development or improvement,…