Ohio Contractor's Business and Law Exam

Ohio Contractor's Business and Law Exam Source: NASCLA Contractors Guide to Business, Law and Project Management – Ohio, 4th Ed., Chapter 2, "Choosing Your Business Structure" (Pages 2-1 through 2-7)

Key Concepts

Sole proprietorships (Page 2-1): Simplest ownership form; the owner owns the assets, bears personal liability for all actions undertaken in the name of the business, and reports net income as ordinary income. The business terminates on the owner's death. If it does business under a different name, a fictitious name certificate typically must be filed.

Partnerships (Pages 2-2, 2-3): All owners in a general partnership have personal and unlimited liability for all actions undertaken in the name of the business, including all debts; each partner is responsible for the acts of other partners acting…

Key Concepts

Board structure. The Ohio Construction Industry Licensing Board is created within the Department of Commerce and consists of seventeen residents of the state organized into four sections: an administrative section plus three specialty sections — plumbing and hydronics; electrical; and heating, ventilating, air conditioning, and refrigeration (ORC 4740.02(A); Chapter 3, OCILB section). Each specialty section has five members in a 1-2-2 pattern: for the electrical section, one electrical inspector employed by the department of commerce, a municipal corporation, or a county; two electrical contractors with no union affiliation; and two who are signatories to agreements with unions representing electricians (ORC 4740.02(C)). A member whose term expires continues in office until a successor takes office or until sixty days have elapsed, whichever occurs first (ORC…

Source: NASCLA Contractors Guide, Chapter 7, Bidding and Estimating

Key Concepts

Bid Documents (Bid Documents section, Ch. 7) - A competitive bid package often includes: an invitation to bid (brief overview, deadlines, general requirements); bid instructions; bid forms — bid sheet, bid schedule, bidder's questionnaire on experience, financial responsibility and capability, and a copy of the contract; and supplements — items important to the overall bid process such as a property survey and soil analysis. - A bid can be determined non-responsive / "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…

Ohio Contractor's Business and Law Exam — NASCLA Contractors Guide, Chapter 8: Contract Management

Key Concepts

Required Contract Elements (Chapter 8, Required Contract Elements): 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 obligations, including work to be done and compensation. Submitting an estimate or bid is considered an offer. If a deadline for acceptance is not outlined in the offer, it expires in a "reasonable time," which is up to court interpretation. A counteroffer is not acceptance.
• Offer Checklist — An offer should contain: date of offer; names and contact information of contracting parties; name and location of project; description of work; contract…

Ohio Contractor's Business and Law Exam — NASCLA Contractors Guide, Chapter 9: Scheduling and Project Management

Key Concepts

Scheduling Process (Chapter 9, Scheduling Process section) - 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 come first (interior and exterior paint can be applied at the same time, but drywall must be completed before paint is applied). - Activity duration depends on: size of the project, labor hours estimated, and length of time dedicated to the task each day. The guide's own example: *if a task is estimated at four hours but your…

Key Concepts

Employment-related insurance

• Workers' compensation (Ohio): All employers who have one or more full-time or part-time employees must carry workers' compensation coverage. Independent contractors and subcontractors are required to obtain coverage for their employees. The Ohio program is administered through the Bureau of Workers' Compensation. Coverage is 100 percent employer-paid and premiums cannot be deducted from the employee's pay. (Managing Risk — Employment-Related Insurance, Page 4-5)
• Employer's liability insurance supplements workers' compensation in the event you are sued for negligence as a result of an employee injury or death. (Page 4-5)
• Unemployment insurance: Generally, employers must pay both state and federal unemployment taxes if they pay wages to employees totaling $1,500 or more in any quarter of a calendar year, or if…

Key Concepts

Which standards govern recordkeeping — The OSHA standards that apply to construction are 29 CFR 1926 (Safety and Health Regulations for the Construction Industry), 29 CFR 1910 (Occupational Safety and Health Standards), and 29 CFR 1904 (Recording and Reporting Occupational Injuries and Illnesses). (Safety Standards, p. 12-2)

Who must keep records, and which forms — Every employer covered by OSHA who has more than 10 employees must maintain three types of OSHA-specified records: Form 300 (injury/illness log), Form 300A (annual summary), and Form 301 (individual incident report). (OSHA Recordkeeping)

Form 301 substitution — An alternative form, such as an insurance or workers' compensation form that provides the same details, may be substituted for OSHA Form 301. (OSHA Recordkeeping)

Key Concepts

New hire reporting (Ohio New Hire Reporting System) - Purpose of new hire reporting is to aid in child support enforcement; the National Directory of New Hires compiles new hire information from all states to track child support obligations nationally, and it also helps prevent fraudulent unemployment and welfare benefit payments (NASCLA, Employee Management — New Hire Reporting). - Ohio employers must report all new employees and contractors no later than 20 days from the date of hire/rehire, or within 20 days of the date payments to the contractor begin. The contractor report must include name, address, SSN or FEIN, date payments begin, and the length of time the contractor will perform services (Ohio Contractor's Reference Manual, Ch. 11 — New Hire Reporting Requirements).…

NASCLA Contractors Guide — Financial Management chapter

Key Concepts

The accounting cycle (NASCLA Contractors Guide, Financial Management chapter — The Accounting Cycle section) is a series of events repeated each reporting period, beginning with a transaction and ending with closing the books and preparing financial statements. The six steps, in order: 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

Bookkeeping is the first step in the accounting process and involves the accurate recording of all financial transactions. A transaction is an event that either increases or decreases an account balance; a source document is the proof a transaction took place (cash receipts, credit card receipts, customer invoices,…

Key Concepts

Commercial Activity Tax (CAT) - The CAT applies to businesses with Ohio taxable gross receipts of $150,000 per calendar year. Businesses that qualify must register for the CAT, file all applicable returns, and make all corresponding payments. (Ch. 15 — Commercial Activity Tax) - The CAT applies to sole proprietors, partnerships, and corporations, as well as service providers and persons engaged in the sale or rental of any type of property. (Ch. 15) - Out-of-state businesses must pay the tax if any one of these is met: more than $500,000 in Ohio taxable gross receipts; more than $50,000 in real or personal property in Ohio; more than $50,000 in payroll for work in Ohio; or more than 25 percent of their property, payroll, or…

Key Concepts

Definitions (§1311.01). "Original contractor" includes a construction manager and any person who contracts with an owner, part owner, or lessee to construct, alter, erect, improve, repair, demolish, remove, dig, or drill any part of an improvement (§1311.01(E)). A "construction manager" is a person with substantial discretion and authority to manage or direct an improvement who is in direct privity of contract with the owner, part owner, or lessee (§1311.01(F)). A "subcontractor" contracts with someone other than the owner, part owner, or lessee (§1311.01(D)). "Laborer" includes any mechanic, worker, artisan, or other individual performing labor in furtherance of an improvement (§1311.01(C)). "Wages" under §1311.01(K) includes all contractually owed benefits.