Mississippi Law and Business Management Exam

Key Concepts

When a license is required - Commercial: A commercial contractor license (the "Certificate of Responsibility," or COR) is needed for contractors or subcontractors performing work over $50,000 per job, public or private (MCA § 31-3-1; Chapter 3, "When is a Contractor's License Needed?"). Below that threshold, contact the city or county where the job is located. - Residential builder: any corporation, partnership or individual constructing a building not more than three floors in height for use by another as a residence when the cost exceeds $50,000 (MS Code § 73-59-1). - Remodeler: any corporation, partnership or individual undertaking an improvement exceeding $10,000 to an existing residence (MS Code § 73-59-1). - Residential subcontractors of any tier doing electrical, plumbing, mechanical, and/or HVAC work need…

Mississippi Law and Business Management Exam Source: NASCLA Contractors Guide to Business, Law and Project Management — Mississippi, 6th Edition, Chapter 7: Bidding and Estimating

Key Concepts

Bid documents (Bid Documents, Page 7-1). A competitive bid package often includes an invitation to bid (brief overview, deadlines, general requirements), bid instructions (how the bid is completed and submitted), bid forms (bid sheet, bid schedule, bidder's questionnaire, copy of the contract), and supplements (items such as a property survey and soil analysis). The bidder can be found unresponsive if information is incorrectly submitted or omitted altogether. Pre-bid meetings may be scheduled, especially for larger projects; project specifications and any changes to the bid package are discussed there. If changes are made to a bid package **before it is…

Key Concepts

Who may claim a lien (§ 85-7-403; Page 16-1) - All contractors, subcontractors and materialmen furnishing material for the improvement of real estate; - All registered architects or professional engineers furnishing plans, drawings, designs, or other architectural or engineering services on or with respect to any real estate; - All registered land surveyors performing or furnishing services on or with respect to any real estate.

Mississippi limits lien rights to contractors who have proper licensure; contractors and subcontractors must provide current proof of licensure upon request to any owner, contractor, subcontractor or materialman. Liens cannot be filed against the State of Mississippi or its municipalities for construction or improvement of public works (Page 16-1). Governing law: Mississippi Annotated Code, Title 85, Chapter 7 (Page…

Key Concepts

• Bookkeeping is the first step in the accounting process — the accurate recording of all financial transactions; financial statements are derived from this information. Tips include separate business checking account, recording expenses when they occur, avoiding cash payments to keep a "paper trail," balancing the checking account monthly, and keeping records for the time designated by the IRS. (Financial Management chapter — Bookkeeping section)
• The accounting cycle repeats each reporting period: (1) classifying and recording transactions, (2) posting transactions, (3) preparing a trial balance, (4) preparing an adjusted trial balance, (5) preparing financial statements, (6) analyzing financial statements. (Page 14, Financial Management chapter — The Accounting Cycle section)
• Journals: cash receipts and sales journal (cash in or charged sale), purchases journal,…

Mississippi Law and Business Management Exam

Key Concepts

Employer Identification Number (EIN) — Tax Basics chapter, Employer Identification Number section (Page 15-1) - The EIN is a 9-digit number issued by the IRS, arranged as 00-0000000. It identifies the tax accounts of employers and certain others who have no employees. - The only entities that do not need an EIN: sole proprietorships with no employees that file no excise or pension tax returns, and LLCs with a single owner (where the owner will file employment tax returns). In those cases the owner uses his or her social security number as the taxpayer identification number. All other entities, including partnerships, must obtain an EIN. - Apply using Form SS-4 — by phone at (800) 829-4933, fax, mail,…

Key Concepts

Fair Labor Standards Act (FLSA) — Employee Management Chapter, Fair Labor Standards Act section - Federal minimum wage is $7.25 per hour, effective July 24, 2009. If a state rate differs from the federal rate, the employer pays the higher of the two. - Minors under 20 may be paid not less than $4.25 per hour during their first 90 consecutive calendar days of employment (Page 11-4). - Overtime is one-and-one-half times the regular rate after 40 hours in a workweek. - Each workweek stands alone; an employer may not average two or more workweeks (Workweek Defined under FLSA). - Not required by FLSA: vacation, holiday, severance or sick pay; meal or rest periods; holidays off; premium pay for weekend or holiday work; pay…

Key Concepts

Scheduling process. During scheduling you determine the sequence of tasks, activity duration, contingency time, task time ranges, and float time (Chapter 9, Scheduling Process / Final Inspection). Start and completion dates are set by the contract; the scheduler must fit all necessary tasks into that time frame.

• Activity duration depends on size of the project, labor hours estimated, and length of time dedicated to the task each day (Activity Duration section).
• If total activity duration exceeds the contract completion time, "consideration must be given to increasing labor resources, requiring overtime, or extending the project completion date," weighed carefully due to added costs and possible timeline conflicts with the owner (Activity Duration section).
• Contingency time is a buffer between tasks: tasks subject…

Contract Management — NASCLA Contractors Guide, Chapter 8 and Appendix H (Mississippi Prompt Pay)

Key Concepts

Required elements (Chapter 8, Required Contract Elements). Four elements make a contract binding: (1) Offer and Acceptance, (2) Consideration, (3) Competent Parties, (4) Legal Purpose. Notarization is not an element. - Offer and Acceptance: an offer generally states a time for acceptance (typically 30 days); if no deadline is stated, the offer expires in a "reasonable time," which is up to court interpretation on an individual case basis. A counteroffer is not acceptance — acceptance occurs only when both parties agree to the same terms. - Competent Parties: parties must have legal capacity; someone heavily under the influence of drugs or alcohol may lack capacity. Courts may rule a mentally…

Mississippi Law and Business Management Exam — NASCLA Contractors Guide, Chapter 2: Choosing Your Business Structure

Key Concepts

Sole Proprietorships (Ch. 2, Sole Proprietorships section, Page 2-1) - Simplest form to set up; you own the assets of the company — selling the business means selling its assets. - A sole proprietorship is terminated upon the owner's death. - You bear personal (unlimited) liability for all actions undertaken in the name of the business. - Net income is reported as ordinary income; sole proprietors do not pay corporate income taxes. - If operating under a different name, a fictitious name certificate is typically filed.

Key Concepts

Risk assessment and benefits. Risk assessment requires determining two things: the probability of loss occurring and the consequences if the loss occurs. A large-loss/low-probability risk is handled differently from a minimum-loss/high-likelihood risk (Chapter 4 — Risk Assessment). Good risk management provides lower business and liability insurance premiums, reduced chances of being sued, and improved chances of prevailing in a lawsuit (Chapter 4 — Risk Management Benefits).

Property insurance. Covers business and personal property when damage, theft, or loss occurs. All-risk builders' risk insurance covers property owners and builders for buildings under construction, including machinery, equipment, materials, supplies, and fixtures; construction must be in progress for coverage to exist. Named peril builders' risk policies are typically written for fire and lightning. Inland marine, equipment floater,…

Key Concepts

OSHA framework. OSHA was established by the Occupational Safety and Health Act of 1970. The construction-related standards are 29 CFR 1926 (Construction), 29 CFR 1910 (Occupational Safety and Health Standards) and 29 CFR 1904 (Recording and Reporting Occupational Injuries and Illnesses). Mississippi does not have a state-adopted OSHA plan and falls under federal OSHA laws. All employers must post the OSHA poster; in construction it must be posted at the location to which employees report each day (Ch. 12 — Safety Standards). SHARP participants are exempt from federal OSHA compliance inspections for two years, renewable up to three years.