Archive for February, 2014
Once you have determined your Class of license that you'll be applying for with the Board for Contractors, the second step is to determine what classification or specialty your work will cover. You need to know this so you can get the correct classification on your contractors license. The following is a list of the specialty classifications in Virginia:
- Home Improvement
- Fire Sprinkler
- Fire alarm systems
- Gas fitting
- Natural Gas Fitting Provider
- Lead abatement
- Radon Mitigation
- Liquified Petroleum Gas
- Manufactured Home Contracting
- Sewage Disposal System
- Water/Well Pump
- Alternative energy systems
- Accessibility Services
- Asphalt paving & seal coating
- Electronic/communication service
- Environmental specialties
- Farm improvement
- Landscape irrigation
- Landscape services
- Recreational facility
- Swimming pool construction
- Vessel construction
Yo can review the exact definition of each of these specialties in the Virginia Regulations starting on page 5.
Once you have decided which specialties you'll need for your business you'll need to identify one "qualified individual" for each specialty. What is a "qualified individual" for purposes of your Virginia contractors license? It's someone who works fulltime for your company (at least 30 hours per week) and that 1) holds a valid individual license or certification issued by the Board for Contractors, or 2) holds a certificate from an accepted third party organization, or 3) successfully completes the applicable technical examination for the specialty. They must also have the minimum number of years of relevant experience that is required by the Class license you're seeking (2 years for a Class C License, 3 years for a Class B License, and 5 years for a Class A License.)
Before you engage in the construction, removal, repair, or improvement of facilities on property owned by others in Virginia (like in most other states) you must first obtain a contractors license. Contractor licenses are issued by the Department of Professional and Occupational Regulation through the Board for Contractors. Virginia contractor licenses consist of two parts, the first of which this post will cover: Classes.
Virginia has three classes of contractor licenses: Class A, Class B, and Class C. The class that you are in will determine the financial size of jobs that you'll be able to take in Virginia. So when you're considering which class makes sense for your business, you first need to think about the potential size of the jobs you'll be doing.
Class A contractors are the highest class level and can take any financial size job they want. You must get a Class A contractor license if the total value of a single project will be $120,000 or more or if the total value of all of your projects in any 12 month period will be $750,000 or more.
Class B contractors are the second highest level and can take single jobs of less that $120,000 and total annual jobs up to $750,000 per 12 month period.
Class C contractors can only take single jobs worth no more than $10,000 and total annual work of no more than $150,000 per 12 month period.
Because of the higher financial level that Class A and Class B contractors can accept, the licensing application process is more complicated than the relatively easy Class C contractor licensing process.
Once you have determined the proper Class to apply for, the second part of the Virginia contractor license is the classification or specialty designations you'll need, which tells you the type of work you can do. We'll cover that in another post.
Once you have your Virginia corporation legally established or your out of state corporation authorized to do business in Virginia, there are two things you need to do on an annual basis to keep that good standing:
- Pay your annual renewal fee to the Treasurer of Virginia. The amount of the annual renewal fee is calculated based on the number of authorized shares of stock your corporation has, which is typically found in your Articles of Incorporation. The lowest fee is $100 per year (for 5,000 or fewer authorized shares of stock) and increases from there. The fee schedule can be found on the Virginia State Corporation Commission web site.
- File your annual report that updates the State Corporation Commission on the location of your principal office (can be anywhere in the world) and the identity of your directors and officers.
Your Virginia registered agent will receive both your annual renewal invoice and your annual report form each year so make sure you have a good one. If you don't pay the renewal fee or file the annual report form on time your authorization to transact business in Virginia will be terminated.
Sounds like a simple question, right? Of course you would know who your Virginia resident agent is. But do you really?
What we have seen and heard from our clients is that there are a lot of web sites out there that offer to provide Virginia registered agent service for you but don't really tell you anything about who they are, where they're really located (most use a mail drop and not an actual office), and who's in charge. Some don't even have a company name on their web site let alone names of actual people that work for them (and therefore, for you). It seems that the cheaper the price the less you can find out about who's behind the service and where they really operate from.
For something that's so crucial to the ability of your business to operate in Virginia and for your ability to get limited liability protection, it seems important to know more. That's why we're transparent and open about our identity. We would want to know. We think you would, too.
Unlike SWaM certification that is a Virginia state program (which we discussed earlier here), DBE certification is a Federal program. But like the SWaM program, the DBE program seeks to increase the participation of certified companies in government projects. In the case of DBE certification, such projects are ones funded by the US Department of Transportation and other federal sectors. These projects typically include heavy construction, such as building and designing roads, bridges, railroad, port, and airport. "DBE" stands for "Disadvantaged Business Enterprise."
To be certified as a Disadvantaged Business Enterprise, your company must be majority owned and controlled by someone that is "socially and economically disadvantaged." There is a presumption that you meet this criteria if your company is owned and controlled by a women or someone who is Asian American, African American, Hispanic American, Eskimo and/or Aleut, or Native American. In addition, the owner of the company has to have a personal net worth of less than $1.32 million. A personal financial statement for the owner will be required as part of the application process.
More information, including the application form and supporting instructions can be found here.If you want to have both SWaM certification and DBE certification, all you need to do is complete the DBE application. Once your DBE application is approved you will automatically also be SWaM certified (but not vice versa so don't do the SWaM application thinking it will also get you DBE certification). Like the SWaM application, there is no fee for applying for DBE certification.
You may have heard of the term "SWaM certification" in Virginia and wondered what SWaM certification is and who is eligible for such certification. SWaM stands for Small, Women-owned, and Minority-owned Business and is a Virginia state government program. The program is intended and designed to give state contract business advantages and opportunities to businesses that meet the criteria of being either small, woman-owned, or minority-owned. To get such opportunities you first need to be certified by the Virginia Department of Minority Business Enterprise. This involves filing an application, which can be done online, and submitting supporting documentation to prove that your business qualifies.
So who is eligible for this certification? To be considered a "small" business, your business must be independently owned and operated and have 250 or fewer employees or average annual gross revenue of $10 million or less averaged over the previous three years. To be considered "women-owned" at least 51% of the total ownership interest of your company must be owned by women and a woman (or women) must be the chief executive officer or otherwise hold the highest management position in your business. To be considered a "minority-owned" business, at least 51% of the ownership and control of your company must be by people of the following ethnicity: Asian American, African American, Hispanic American, Eskimo and/or Aleut, or Native American.
Obtaining SWaM certification does not cost anything but you need to be sure that your paperwork is in order, especially the documents that establish how your corporation or LLC are owned and managed.