Joint Ventures and Licensing Requirements
If you don’t have a license but are looking to work with another construction company through a joint venture, you must do your research before embarking on this type of arrangement. This is especially important for out-of-state contractors. Our Clearwater construction attorneys know how lucrative joint ventures can be if done right, but can be extremely costly if set up improperly.
As Clearwater construction lawyers, we always recommend hiring licensed contractors to avoid unnecessary legal hassles such as penalties for unlicensed contract activity. In the event that an unlicensed company wants to enter into a joint venture agreement with one that is presently licensed, we want to provide valuable information to you.
What Does the Board Say?
The Construction Industry Licensing Board (CILB), the official department governing business licensing and regulation in Florida, state that joint ventures can be formed with an unlicensed company if the joint venture is qualified like any other business.
How to Qualify a Joint Venture
How does the joint venture qualify? In compliance with Florida Statute Chapter 489, joint ventures are separate entities and must qualify as such. This means there must be a qualifying agent who qualifies the business to be licensed. Before bidding on any projects you must ensure the joint venture is valid. The following factors have to be present for the joint venture to be considered enforceable.
- Is there a written joint venture agreement?
- Is at least one of the joint venture parties a qualified licensed contractor?
- Has each party signed the statement of authority?
- Has the CILB received and approved the agreement?
- If approval is still pending and a bid is awarded to the joint venture, the licensed contractor is required to qualify the joint venture within 90 days of the award.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.