Florida Commercial Pools - Module 1
Assets = Liabilities + Equity
Liabilities = Assets - Equity
Equity = Assets - Liabilities
Construction is similar to other businesses as it relates to planning, organization, management, and structure.
51% of stock ownership is required for control of a corporation.
Five general guidelines you should follow when working on your business plan:
Executive Summary
Description
Research Your Market
Funding
Projections
A partnership, joint venture, or corporation that engages in contracting must obtain a Qualifying Agent.
The corporate form of business is usually the most expensive/costliest to organize.
The S-Corporation is not affected by corporate income taxes, thereby eliminating the double taxation feature of standard corporations.
The Florida Uniform Partnership Act defines a partnership as two or more persons associating themselves as co-owners for the purposes of carrying on a business for profit.
Two types of partnerships recognized in Florida are general and limited. Each general partner is fully and personally liable as co-owners of the business.
A limited partnership is an entity composed of at least one general partner and which, in addition, has one or more limited partners.
A limited partner is:
Immune from liability beyond amount of investment
Cannot be involved in day to day operations
Qualifying business cannot be a limited partner
More of a passive investor
Limited partnerships may have any number of limited partners, but must always have at least one general partner.
Joint Ventures:
Special combination of two or more persons or entities
Rights governed substantially by same rules as Partnerships
Generally thought of as a special partnership for a specific job or undertaking
Typically limited to a single transaction
Control of the Business is the same as a partnership
The three basic steps to ending a partnership: Dissolution > Winding Up > Termination
“Dissolution” is not to be confused with termination: on dissolution the partnership is not terminated but continues until all of the partnership affairs are completed through a process generally referred to as “winding up”
“Termination” is the point in time when all partnership affairs are wound up; winding up or liquidation is the actual process of selling the assets, paying liabilities, and distributing the excess to the partners after dissolution.
A Sole Proprietorship is the simplest form of business organization.
The owner manages the business and is responsible for all decisions.
The owner has absolute authority over all business decisions.
Registration Requirements for County-level:
Occupational License
Certificate of Occupancy
Zoning Permits (Certificates of use)
Registration Requirements for State-level:
Corporate Filing & Fees
Fees go to Division of Corporations
Fictitious Name Registration
Businesses that collect sales tax must register with the Department of Revenue.
The State Retail Sales Tax rate in Florida is 6%.
A DR-1 is an Application for Certificate of Registration (sales tax number).
An SS - 4 is an application for an Employer Identification Number (EIN). (*Everyone must complete this form except for Sole Proprietors)
The SS - 4 form must be filed on or before the 7th day after the date on which the business begins.
DR - 405: Tangible Personal Property Tax Report
If you intend to operate, promote, and advertise your business to the public using a business name other than your own name of your corporation or partnership as filed with the Secretary of State, you must comply with the Fictitious Name Act.
Any person who fails to comply with the Fictitious Name Act commits a second degree misdemeanor.
Fictitious Name Registration Requirements:
Must be advertised one time in the newspaper
Owner must record a name change or cancellation within 30 days
The name is valid for five (5) years
It expires on December 31st (12/31) of the fifth year
Renewals occur between July 1st (7/1) and December 31st (12/31) of the fifth year
Florida Statute 489.107 created the Construction Industry Licensing Board (CILB)
State regulation of contractors is accomplished through licensing.
In Florida, most non-medical professional and occupational licensing boards are located within the Department of Business and Professional Regulation (DBPR)
Florida Statute 489 provides licensure and regulation of all types of contractors in Florida. It’s divided into three (3) parts: Construction Contracting, Electrical/Alarm System Contracting, & Septic Tank Contracting
A “Certified Contractor” is any contractor who successfully passes a state-administered examination and obtains a certificate of competency issued by a DBPR. Certified contractors are allowed to contract in any city, county, or district in the state without being required to fulfill competency requirements of that jurisdiction.
A “Registered Contractor” is any contractor who has registered with the DBPR and has fulfilled the competency requirements in the city, county, or district for which the registration is issued. Registered contractors can only contract in the jurisdiction that issued the license or in areas that recognize it.
A licensed plumbing contractor must complete a six (6) hour course of continuing education in order to engage in the installation of medical gas.
If approved, a worker’s compensation exemption takes effect 31 days after filing and remains in effect until revoked or for a period of two (2) years, whichever occurs sooner.
Licensure as a certified or registered contractor must be renewed every two (2) years.
The sale, delivery, assembly, or tie-down of prefabricated portable sheds that are 250 square feet or less in interior size and are not intended for use as a residence, are exempt from state licensure.
The business organization may not engage in contracting until another qualifying agent is employed, unless a temporary nonrenewable certificate of registration is issued. This temporary certificate/registration shall only allow the entity to proceed with incomplete contracts.
The qualifying agent must be licensed as a certified or registered contractor in order for the business organization to be certified/registered in the category in which the qualifying agent is licensed.
The business organization must notify the DBRP of the termination of the qualifying agent and obtain another qualifying agent in 60 days.