In part one of this two-part series, the Memphis contractor lawyers at Cotney Construction discussed some of the steps contractors should take before breaking ground in a new state. Expanding your company’s national footprint by moving into new territories is an exciting opportunity that can prove to be an enormous boon to your business, but you must be diligent when taking the next big step. If you fail to acquire the proper licensing and violate local or state laws, you’ll be wishing you had been more careful as you are hit with costly fines that derail other parts of your business.
Fortunately, by partnering with a Memphis contractor lawyer, your construction business will benefit from an array of services including license defense, dispute resolution, bid defense, and more. Our attorneys can help keep your business legally compliant so you can focus on what matters most — growing your business. Here are some other tips for contractors looking to break ground in a new state.
Appoint a Qualifying Party
You must appoint a qualified individual to take responsibility for your company’s performance in the new state. This is a requirement for every contractor license, but the specific requirements for each qualifying party depend on the jurisdiction. Your company can only continue to work for as long as the qualifier is involved in the project.
According to Construction Business Owner, contractors must have a qualifying party sit in for exams in 20 states. This may require gaining approval from the state licensing board beforehand. It’s imperative that you prepare accordingly so you don’t squander money on retakes.
Since some states have reciprocity agreements with other states that allow contractors to attain licensure more quickly, it’s wise to investigate whether or not your business can benefit from this type of arrangement. An attorney may be able to help you find the answers you are looking for regarding licensing reciprocity.
Applying for a contractor license in a new state could require extensive documentation of your current licenses as well as detailed descriptions of your former worker experience, comprehensive background checks, and a review of your finances, insurance policies, surety bonds, and more. Make sure you have all of your ducks in a row before applying.
In order to break ground in a new state, contractors typically must register as a “foreign business entity” through the secretary of state. Generally, contractors must undergo this process in addition to obtaining the proper contractor licensing to legally supply provisions of labor and materials.
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.