South Carolina Business Management and Law - Commercial Contractors

South Carolina Business Management and Law — Commercial Contractors

Key Concepts

Sole proprietorship — The owner bears personal liability for all actions undertaken in the name of the business; net income is reported as ordinary income, and sole proprietors do not pay corporate income taxes. The business is dissolved upon the owner's death. (NASCLA Contractors Guide, Chapter 2)

General partnership — A partnership exists as long as the partners agree it will and as long as all general partners remain. If a general partner leaves the partnership or dies, the partnership dissolves and the assets must be sold or distributed to first pay the creditors and then the partners. All general partners have personal and unlimited liability; limited partners are liable only for their previously agreed-upon…

South Carolina — NASCLA Contractors Guide, Bidding and Estimating All references: NASCLA Contractors Guide, Chapter 7, Bidding and Estimating

Key Concepts

Bid Documents (Page 7-1 to 7-2). A competitive bid package often includes an invitation to bid, bid instructions, bid forms (bid sheet, bid schedule, bidder's questionnaire on experience/financial responsibility/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 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.

South Carolina Business Management and Law — Contract Management (NASCLA Contractors Guide, Chapter 8 and Appendix J)

Key Concepts

Required contract elements (Chapter 8 — Required Contract Elements, Page 8-1): Four elements make a contract binding: (1) offer and acceptance, (2) consideration, (3) competent parties, (4) legal purpose. Notarization is not required.

• Offer and acceptance: A counteroffer is not acceptance; acceptance occurs only when both parties agree to the terms. Parties are not bound during negotiation, so be clear when a communication is for negotiation purposes so it is not misconstrued as an offer. An offer typically allows 30 days for acceptance; if no deadline is stated, it expires in a "reasonable time." The Offer Checklist includes date of offer, names and contact information, project…

NASCLA Contractors Guide — Chapter 9: Scheduling and Project Management

Key Concepts

Scheduling process elements (Chapter 9 — Scheduling Process) - Sequence of tasks: Some tasks run at the same time; others must be finished first (drywall before paint; interior and exterior paint can run simultaneously). - Activity duration depends on three factors: size of the project, labor hours estimated, and length of time dedicated to the task each day. Example: a 4-hour task with only 2 hours per day available = 2 working days duration (Activity Duration section). - Float time is the remaining time after a task is complete and before the next task begins. Free float time = the amount of time an activity can be delayed without impacting the **early start of…

Exam: South Carolina Business Management and Law – Commercial Contractors

Primary source: NASCLA Contractors Guide, Chapter 4 — Managing Risk

Key Concepts

Types of Bonds (Chapter 4 — Types of Bonds section) - Bid bond – guarantees the contractor, if awarded the job, will do the work at the submitted bid price, enter into a contract with the owner, and furnish the required performance and payment bonds. Serves as a deterrent against frivolous or unqualified bidders. - Performance bond – guarantees the contractor will complete a contract within its time frame and conditions. - Payment bond – guarantees subcontractors and suppliers that they will be paid for work if they perform properly under the contract. - Maintenance bond – guarantees that for a stated period, typically…

Exam: South Carolina Business Management and Law — Commercial Contractors

Key Concepts

Who must keep records. "Every employer covered by OSHA who has more than 10 employees, except for employers in certain low-hazard industries in the retail, finance, insurance, real estate, and service sectors, must maintain three types of OSHA-specified records of job-related injuries and illnesses" — OSHA Form 300, OSHA Form 300A, and OSHA Form 301 (Chapter 12 — OSHA Recordkeeping).

The small-employer exemption is not absolute. Employers with 10 or fewer employees are exempt from OSHA recordkeeping requirements unless they receive an annual illness and injury survey form from either the Bureau of Labor Statistics (BLS) or from OSHA. Employers selected for these surveys will be notified before the end of the prior year…

Key Concepts

Fair Labor Standards Act (FLSA). The federal minimum wage is $7.25 per hour, effective July 24, 2009. If a state minimum wage differs from the federal rate, the employer must pay the higher of the two rates. Overtime is paid at one-and-one-half times the regular rate after 40 hours of work in a workweek (Chapter 11 — Fair Labor Standards Act section).

Immigration and Nationality Act / Form I-9. The I-9 shows the worker has legal immigration status. It must be completed with required documentation within three days of hire — Section One by the employee at the start of employment, Section Two by the authorized representative who examines the documentation within that three-day window. Completed I-9s must be kept **at least three years…

Key Concepts

• Accounting cycle (6 steps): classify and record transactions → post transactions → prepare a trial balance → prepare an adjusted trial balance → prepare financial statements → analyze financial statements (Ch. 14 — Accounting Cycle section).
• Journals: Cash receipts and sales journal (cash in or a sale charged); purchases journal (all purchases); cash disbursements journal (cash paid out — loan payments, payments on vendor invoices); payroll journal; general journal (non-cash transactions) (Ch. 14 — Classify and Record Transactions).
• Debits and credits: a debit increases asset accounts and decreases liability accounts; a credit does the reverse. Every entry contains both a debit and a credit that must equal each other (Ch. 14 — Understanding Debits and Credits).
• Chart of accounts: 1000–1999…

Key Concepts

Employer Identification Number (Ch. 15 — Employer Identification Number) - 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 will file employment tax returns). In these cases the owner uses his or her Social Security number as the taxpayer identification number. All other entities, including partnerships, must obtain an EIN. - The EIN is a 9-digit IRS number formatted 00-0000000. Obtain it by calling the Business and Specialty Tax Line at (800) 829-4933, faxing or mailing Form SS-4, or applying online.

Key Concepts

Who may lien. Lien rights run to "a person to whom a debt is due for labor performed or furnished or for materials furnished and actually used in the erection, alteration, or repair of a building or structure upon real estate or the boring and equipping of wells." This includes general contractors, subcontractors, suppliers, site work contractors, architects, engineers, surveyors, laborers, and even a private security company used at the construction site (Page 16-1). Section 29-5-10(a) states that "any private security guard services provided by any person at the site of the building or structure during its erection, alteration, or repair is considered to be labor performed or furnished" (Appendix K, Section 29-5-10(a)).

Key Concepts

NEPA (National Environmental Policy Act). NEPA applies to a construction project only if it is considered a "federal action." It ensures that federal agencies consider environmental impacts in federal planning and decision making, and it covers construction and post-construction activities. (NASCLA Contractors Guide, Chapter 12 — Environmental Law section)

Clean Water Act / NPDES permitting. Regulated construction activities include construction activities and associated areas one acre or greater in size that require NPDES permit coverage. (Chapter 12 — Clean Water Act section) The original 1990 regulations covered sites disturbing five or more acres; in 1999 the EPA expanded the NPDES program (Phase II) to include construction sites that disturb one acre but less than five acres, with possible exceptions allowing a waiver. *(Chapter 12…