NC General Contractors License

GENERAL CONTRACTORS LIMITATIONS LIMITED – Up to $500,000.00 on any single project INTERMEDIATE – Up to $1,000,000.00 on any single project UNLIMITED – Not restricted as to the value of any single project Any building job costing more than $30,000.00 requires a contractors license

CLASSIFICATIONS Building Residential Highway Public Utilities Specialty Unclassified – (includes all of the above classifications)

EXAMINATIONS and LICENSURE (N.C. G.S. 87-10) A qualifying examination is not an occupational license, and does not grant the holder of such examination the authority to practice general contracting. Individuals may be licensed by their personal examinations or the examination of a responsible managing employee. Partnerships and corporations are licensed by examination of a responsible managing officer or member of the personnel of the applicant. If the qualifying party leaves, however, the licensee must replace the qualifying party within thirty (30) days or the license is canceled. Licenses must be renewed annually by December 31 for the following year, or the license expires. If a license is not renewed within sixty (60) days following expiration, then it becomes “invalid,” and the contractor becomes, in effect, unlicensed. Reexamination is required if a license is not renewed for two (2) years following expiration. After a lapse of two years, no renewal shall be effected and all requirements for a new license must be fulfilled, in accordance with G.S. 87-10.

HOW TO OBTAIN A LICENSE 1. Complete the License Applications or Examination Request Form with appropriate Application and/or Examination Fees to: North Carolina Licensing Board for General Contractors PO Box 17187 Raleigh, NC 27619 (919) 571-4183 For all other shipments, such as UPS or bulk mailings, use the following address: 3739 National Drive, Suite 225 Raleigh, NC 27612

2. Upon approval from the Board, you will be sent an Examination Eligibility Letter, along with instructions for registering and scheduling the examination. Included with your letter will be an identification number assigned by the State to you for this testing program. You must use this identification number when scheduling for your examination. 3. The eligibility letter is valid for 120 days from the date on the letter, and allows the candidate to schedule for one All questions and requests for information about examinations should be directed to PSI. PSI Examination Services 3210 E Tropicana Las Vegas, NV 89121 (800) 733-9267 · Fax (702) 932-2666

Working Capital Current Assets – Current Liabilities Limited: $17,000.00 Intermediate: $75,000.00 Unlimited: 150,000.00

In application, licensing board allows for: $500.00 cash in hand (not verified). $5000.00 for materials in stock (not verified). Must show the remaining $11,500.00 of “working capital” (must be verified by notarized financial statement). There is an application fee of $50.00 and an examination fee of $50.00. Three references are also required for application.

Exam Outline Fundamentals of Business Management Accounting terminology Workers compensation Wage and hour requirements Employment security commission requirements Laws and Regulations Laws and regulations applicable to General Contracting in NC OSHA Regulations Lien and construction laws Warranties

Exam Outline (cont) Code Applicable code for license Familiarity with code and code documents Technology Surveying Drywall, lathe and plaster work Foundations, footings, site work, masonry Materials and their use Steel construction Structural members, application and installation Finish work Rough Carpentry including roofing and all essential details

Exam Outline (cont) Blueprint Reading Understanding specific language. Take-off materials from a set of blueprints. Ability to calculate materials for a project. Ability to determine quantity and extend costs of materials and labor. Basic knowledge of heating, plumbing and electrical. Understanding site, grading and landscaping plan and detail.

Accounting GAAP – Generally accepting accounting principles Auditing – independent reviews of accounting records Partnership – owned by two or more people with contract agreement can be general or limited. Prepaid expense – supplies on hand, advance payment, ins + property tax. Liabilities – debt owed to outsiders – current and long-term. Current liabilities – due within one year or less, notes payable, accounts payable Long-term liabilities – due in more than one year Net worth = total assets – current and long term liabilities Working capitol = current assets – current liabilities Materials on hand – current asset Income sheet – profit / loss statement

Laws and Regulations Governing body has 45 days to pay on completed contract before being required to pay interest on balance due. Construction bids required on all public contracts of cost is more than $100,000.00. NCLB – operates under “general statue 87” Warranty period on construction site – one year. Enforceable contract must be in writing for land or real-estate. 120 days to file a lien on labor and materials, 180 days to file a lawsuit from first day Take building permit – 6 months to start Can stop for 12 before expires Can wait 2 years to renew license before having to retake exam Bid can be retained if work not started within 10 days of award

General Overhead This type of overhead is also defined as being “home office overhead”. This is basically the cost of maintaining a construction company. It includes certain fixed expenses that must be paid regardless of the amount of work done or contracts entered into. Examples Office rent Telephone Advertising Automobile Taxes Salaries Utilities Stationary and supplies Legal expenses Insurance Interest payments (operating loans) Consulting fees

Indirect Cost Indirect Cost is the job overhead that can be defined also as “job overhead”. A cost attributed to a given job but not a given activity. Examples Supervision Job housekeeping Temporary buildings Security Electricity Interest payments Weather protection Permits Temporary roads and drives

Indirect Cost (cont) Allocating job overhead cost is sometimes a matter of judgment on the part of management. Management must make a decision on whether to track a cost item or lump it into overhead. Job overhead is usually thought of as time dependent. In other words these costs are charged on a daily, weekly, monthly basis. Therefore it is important to establish a preliminary schedule in order to determine indirect cost

Direct Cost Direct Costs are those cost of specific activities in the construction project. We may think in terms of two sources for direct costs The physical materials the owner will be left with or in other words the completed project The materials, machinery and labor used by the contractor to do the work including subcontracts. In other words, direct costs are those cost which can be associated with specific activities in a project.