I Want To Be A Legit Company. - Business


I've been doing construction since freshman year of high school. I've worked on my own a lil bit and worked for other contractors. I can run a small business but don't know what all I need to be completely legal. I know I need insurance but what liscenses do I need. I won't have but 1 employee and I plan on subing most of the work out on large jobs. Can anyone tell me what all I need to do. FYI I live in southern Illinois in a town of 5,000 people.

Not sure about your license requirements there. With an employee you will have to do a payroll and report all taxes withheld (Federal, State, City), unemployment (federal and State), SS and Medicare and Workers Compensation. Most guys here use a payroll service, accountant, or Employee leasing service.

Who do I talk to about doing all of those things sir?

Not sure how old you are, but the library may be a great place to start.

21. Can someone give me a non-smartass answer?

Am I missing something, who gave a smartass answer??

I think Warren was giving you good advice, lots of info at the library.
Check these sites as well.

Here is the answer you need. If you have to ask these kinds of questions, you are not ready to run a business.

Good to see it isn't just me they are flocking to today....

Please tone that down if you want help here.
Here's a thread that might get you started in the right direction.

Now Lone I've been watching you for months now & you can be a little hard on the children, give JR a break he's only wants to fit in.
Sorry Dufast, But thats a smart A remark & you'll need to get used to it if you are going to hang around here.
On a more serious note keep reading these threads some of these guys really know there S & the library is a good place to start & with the internet you have one just a click away.
Good luck Fast

First off, Loneframer was in my signature line because I used his quote. I have since removed it, as everyone keeps thinking I am him. Secondly, I was being realistic. I take pride in the young ones who work hard to succeed. Look at the posts by Framing Pro and how I have reacted to him.

you know warren your a very helpful guy...i guess you knew it all when you started.i am kind of surprise there isn't more support coming from you,after all hes coming on here asking how to do it LEGIT..
op your first step is to obtain a business licence followed by a tax id# when you get these thing you will be given all the legal literature you'll need.

We know your whole take on "legit"

yeah i know I'm a bad dude cause i try to help my friend's and fellow tradesman do what they were trained to do to put food on the table.

Hey Warren sorry about the mix up with your name. As far as the rest of my post please reread it I may have poked a little fun but the last paragraph was serious & somewhat supportive.

If C/T ever has a convention are we going to have to bring our own boxing gloves or will they be handed out at the door?

Remember the jousting stick on American Gladiator?
They are standard issue....

Sorry they called them pujil sticks .

Dear Scrappy Doo,
I'm gonna give it to you short and sweet.
1)Go out and register yourself an LLC. Get a business checking account, get liability insurance, register with your municipality for your trade.
2)If you hire someone full time, make it legit. Meaning they are on a W2. Pay a payroll service to dole out the payroll. If you're not a numbers guy, you don't want to do this. It is money well spent. Make sure the service collects the payroll tax, employer withholding tax and hopefully the workers comp dues. They'll pay this stuff on a quarterly, and your newly formed business checking account will automatically enable this. You'll get dinged quicker than you know it for not having this stuff in line.
3) If you hire subs, everyone gets a W9. Look it up. It's a form they fill out so at tax time, you have everyone's info to send them a 1099. Get insurance certificates or sole practitioners workers comp waivers otherwise you'll be responsible if down the road they audit you and they didn't have it at the time.
4) Don't piss off the elder-statesmen on Contractor Talk. These guys have been doing this before you were born, have experience in things in you can't imagine, and come from the school of thought that information is to be share with those who know what to do with it. Bad bridge to burn.

That is possibly the best 3rd post ever written. Welcome to CT!!

He's from my area, too! Must be the water down here or something...

I think you stole the first three from "Contracting for Dummies"

I admire the lad for asking. I admire him for wanting to get out and do it.
Here is my advice: Minimalist is right, but I don't think that you are ready for this kind of responsiblity. Why do I say this? You need to be self sufficient and look things up on your own. You need to know where to find the answer to your questions without the help of others. I would also say that if after you did a lot of research, and then still had questions, more guys here would be a little more willing to offer assistance. Most of us respect hard work, and your post does not indicate you are ready or willing to put the hours needed to start a business.
My recommendation would be to find a local organization like SCORE. http://www.score.org/index.html
Score is made up of retired business owners who work with individuals wanting to start their own business. You will find a lot of advice and good mentors to help you with your questions. They are local guys and should be able to answer all of the questions you have and the ones that you don't even know that you are going to have.
As for the employee, it's not just the paper work and taxes. You are responsible for another persons income, their livelihood. They are not just a means to your end. They are counting on you, and you need to take that very serious. Are you ready to do what it takes to get them to do what you need them to do? Are you ready to fire them if need be? It is easier than it sounds.

If you were truly ready to operate a business you wouldn't need to ask elementary questions. Besides the library is where anyone should start, or Amazon Books.
Read Running a Successful Construction Company by David Gerstal. Subscribe to and read Remodeling, Fine Homebuilding, Builder, Fine Woodworking. Read The Little Black Book of Connections and the The Little Red Book of Sales.
Get a book on manners and read it. You better get a tougher skin if you want to be a contractor. JAW

Oh I'm no green horn here fellers. My employee I will have will be my 58 year old father who will retire from teaching a high school class in which they build a house in 2 or 3 years so he will work half days if that. Only reason I'll hire him is because he'll go crazy if he can't work with me. Now he has been doing this for just as long if not longer than you people. He started out at my age and he says I know more than he did. I know how to save back for all the expences I just don't really know where I need to go to get my liscense and everything. Didn't mean to offend that 2nd post guy I never take offense on the internet I figured you all didn't on here either. Thanks.

If you are 21, you are green horn. I have tools older than you, and most of these guys giving advice have tools older than me. I have been doing this work since I was 17 and I am still green to a lot of this biz. Lesson one, check your pride at the door or you will keep trippin' over it.
As for your father, he has been teaching a class, not doing this for a living. There is a big difference. His job security was not hinged on the house that he built. He had a nice teacher salary, benefits, and 3 months off a year. Most of us work 50-60 hours (or more) a week and then put in 15-20 more in the office and shop. He may know how to swing a hammer, but keeping schedules and meeting client expectations is a far cry from a 3 year house project for a building trades class.
Saving up for your expenses...interesting. It's going to take around 5k in start up costs. Then you will need operating expenses and a little cushion for the unforeseen. Operating expense need to cover you and your dad's salary for at least three months.
Good luck and keep the enthusiasm up!

I like that "check your pride at the door or you'll keep trippin over it" line I would add "ego" in as well

I gave you a better paying option in the other thread, you should check it out. You also kind of left some unanswered questions on that thread in relation to injuries. Hop on over and straighten those things out if you can.

I hate to break it to you, but I agree with others that if you are 21 and started in your freshman year of high school, you are still a greenhorn. I have been working construction for a solid 17 years, and while I've gotten proficient at various trades such as framing, finish, electrical, ect. I still feel like I am a noob on various trades and skills. I thought I was pretty good at painting, until recently I worked with a former painter of 25 years. He was showing me stuff which made me feel like I didn't know the first thing about painting.
Why are you in such a hurry to get started on your own business if I may ask? You'll have much better success if you work as an employee along side journeymen carpenters for a while longer. And in the meantime, look into taking some classes, get your degree in construction management. Start reading business books, become an expert in marketing, business, and sales. In five to ten years, maybe you will be ready.
But if you are determined, then to answer your first question, you should find all your answers online on how to get licensed, bonded, ect. Each state is different, your state should publish all that information online if you do some searching. I disagree with the guys saying to use the library, that's what we did when I was in college. It's 2011, we have better tools now, use the internet.

I think my Makita table saw just turned 21. Been using it since day one, still works as good as new.

I'm not surprised the OP thought it was a smartass answer.
Son, hitch up your wagon and head on down to the library! On your way back, stop by the general store and pick up some molasses and two yards of burlap.

I have tools passed down that are older than all of you as well. I do not mean any disrescpect. And my dad didn't just teach the class he ran the his construction company full time as well he had plenty of employees and did it for 30 years. He went to school till 3 then worked till 8 at night and still did all the business. Not that that is the point just don't make assumpitons about him he works his ass of and knows what he's doing. I have a degree in construction management but the main thing they went over was estimating blueprints scheduling and basically told us to just work for someone else. It was a great program but didn't teach anything about starting your own business. I know how to do the work estimate schedule just don't know how to get the correct liscense and work out taxes but from the few that have given me info I now have an idea.

I will concour The info is free and you can keep as long as you can remember it I have lernt so much here and am very thankfull

Why not ask Pa the questions you are asking here? Seems like he would have all the answers.

If your dad has run his own business for 30 years then why are you not just taking over his company that is obviously well established? And why isn't he helping you answer all these questions since he would know all of the things your asking better than us since he lives in the same area as you.
Sorry but something doesn't ring true here.

First of all, what the hell is a library?
Second you need to listen to these guys. I'm just getting into the swing of this too and I'm 25, been doing it since I graduated and guess what, I'm still green.
If you want to get started right away (at least in this state) you can get yourself some insurance, a license if you need it, and talk to an accountant about your tax liabilities and learn about your states sales tax laws. For 10 bucks at the county office building I registered a business name so I could create a bank account and operate under that name, which didn't really make sense because I have just been using my own name, it seems more personal.
Anyway, then you need to go out and start finding work. If you make it big time enough then you should consider creating a corp and a lawyer can tell you what is best for your needs.

I don't know if it's different in other states or I am just stating the obvious but in Cali you have to have 4 years of journeyman level experience before applying for your license and at 21 I don't see how you have this.

I don't know how it works in Ilinois, but here anyone can open a company.

That does not mean you can do the work though. As Mike Holmes found out you need to be a qualified tradesman. Do you have any trade licenses? Are you a journeyman carpenter? Plumber? Electrician?

If not, you'll need to hire these guys, or sub everything out to licensed trades.

But you can be the company owner.

How does it work in Canada kato do you have any pre qualifications before applying or receiving a contractor license? Honestly just curious of the process there.
I don't know how different Illinois is from California but I don't think you make the qualifications for a gc license.
If not, don't be discouraged just find a good gc and put in the time.like stated from op a little more experience may do you good.

Exactly what I was thinking. Best get a job and learn the trade, kid. I'm 28 and I grew up on the jobsite and I'm still a greenhorn in comparison to a REAL builder. If you ever want to be a competent builder and enjoy the respect of your subs and employees you best learn how to do the job. 3 years and some high school experience generally spells HACK. JAW

In Ontario anyone can open a business. Just go online and pay your fee and fill in the blanks and bingo, you have a company. For an LLC you would need a lawyer though.

In rural Ontario you only need a journeymans' ticket for plumbing, electrical, gas fitting and maybe a few others. Not carpentry. Anyone can do carpentry.

In the Toronto area you need to get a General Contractors License. On it, it states "all work to be done by licensed trades". That means you will need your journeymans' ticket in Carpentry to do that work in the Toronto area.

That's how Mike Holmes got the boot. He holds no licenses.

Then there is the issue of liability. If something should happen your insurance company may say "well you were not using licensed trades, so we won't cover your claim."

I am an advocate for trade licensing in carpentry. This has nothing to do with a business license. It takes about 4 yrs. in an apprenticeship program for someone to graduate. There are five exams covering everything from footings to finish work.

Generaly, the best paying carpentry jobs here in Canada, the advertiser states " must have their C of Q " ( certificate of qualification ) It is of course required on all union sites.

This licensing leads to pride in workmanship, respect, and higher wages paid for the effort and training the individual has gone through.

Like our Provincial Government has stated " on par with doctors and lawyers "

To the OP:
Please grow a pair and thicken up your skin or this industry and this forum are not for you.

A CM degree means nothing when you haven't done anything yet. There are many people with CM degress out that aren't worth the air they breathe. My logic? I feel like that CM degree should have prepared you to know how to hunt down the answers to these kinds of questions. You know, like, maybe go visit your local building department or the library? Coming onto this forum and asking these questions in the way that you did is the lazy way out. Expecting anyone to just hand out info that they had to figure out themselves when you ask in such an entitled fashion is somewhat insulting.

Additionally, at 21, you ARE still green because you a) haven't really seen that much in the field, b) haven't done it full time all day every day for 6 years, and c) you haven't had to depend on it for your daily bread and butter. When it's your a$$ and your money on the line, you either have to get wise real quick or get ready to go down in a ball of flames. Floating on your dad's cash and working side gigs with him doesn't count.

All that being said, everyone on here wants to see a new guy in the biz succeed. Our industry desperately needs younger guys like you. But if you can't approach business with the right attitude, you will absolutely fail. Business rewards those that are hungry and agressive and go out and make things happen. You need to eat, sleep, and breathe it all day every day. It IS hard work. You WILL make mistakes and you WILL get frustrated, but if you have the right attitude and stay focused, you WILL get past those and be successful.

I want you to succeed. But leave that naive bulls**t for someone else. If you can't learn that now, you'll learn it the hard way when your business fails or jobs blow up in your face. Now please get your head right and succeed so you don't make the rest of us younger generation of contractors look bad.


The Olligator - Motivational Speaker At Large

P.S.- BTW, belated welcome to CT!

Thanks Kato interesting
I wish that was more applied in the states. I grew up in a state with no union and my school had no shop classes. I was one of the lucky ones who grew up a construction baby and carpentry saved my life but I have a lot of friends who took the wrong path because there wasn't much else to get into. Some kind of program or class to get into that helps with a smooth and easy transition into the trades with a broad understanding would do alot of us young guys some good.

Unions only bring standards down, not up. They cut off competition and believe that every job is their because they are Union. Union is all BS. I have a buddy who moved to Boston to work in concrete. He has never done concrete and never paid his dues. They backed him in and he is now a journeyman making $35 an hour.
The best school is life and a good mentor.

Unless your an electrician or plumber here you can just go to work. No insurance or license required.
But guess what they get all bent out of shape about. The sales tax collection. The state does need their cut.
Edit: As far as I know this only applies to single tradesmen, I have no clue what is required for large companies or general contractors here.

yea I'd like to be legit too, but way to hard in hawaii so i stay under the radar

Why? What makes it so hard? You from Hawaii or did you move there?

I moved here in 1986 from so. Fla.
besides whats listed below, one must show 30,000$ in a bank account
[*][*]To qualify, you must be at least 18 years old and a U.S. citizen with a valid Social Security number. You must also show proof of at least four years of experience working in construction in a supervisory position over the last 10 years. Three notarized certificates signed by three different people are needed as proof. You'll also need to furnish a recent credit report and pass a
. According to the application, you must also "Submit a current financial statement (not more than a year old) prepared and signed by a licensed public accountant or a certified public accountant holding a current permit to practice." The application also states that you must "have and maintain a definite place of
[*]You must pass a two-part test, which is administered by an independent testing service named Prometric. The first part covers business and
, and the second part is on field knowledge of general contractors. You can request to have the test administered in another state, but if you're not located near a Prometric secured office you must pay extra fees. If you wish to make this request, you should submit it in writing with your application to allow extra time for special processing.
[*]As of mid-2010, the application fee is $50 and the examination fee is $150 ($75 per part). The licensing fees are a little more complicated because all Hawaiian general contracting licenses expire on Sept. 30 of each year ending in an even number. The "FAQ from the Hawaii Department of Commerce & Consumer Affairs website" breaks it down as follows: $545.00 for licenses obtained between Oct. 1 of the
even-numbered year and Sept. 30 of the odd-numbered year; $415 for licenses obtained between Oct. 1 of the odd-numbered year and Sept. 30 of the even-numbered year.
[*]Once you pass the exam, you must show proof of worker's compensation, liability and
damage insurance. If you have no employees, you'll be able to file a form to request that the worker's compensation requirement be waived, but you'll still have to show bodily injury liability insurance of at least $100,000 per person and at least $300,000 for each occurrence, and property damage liability insurance of at least $50,000 for each occurrence


Holy ****! It must cost a lot to build there. Do you miss Florida I do but iam in Cali not Hawaii. Alot of that is the same here minus the 30000 : that almost makes it impossible.

besides whats listed below, one must show 30,000$ in a bank account
To qualify, you must be at least 18 years old and a U.S. citizen with a valid Social Security number. You must also show proof of at least four years of experience working in construction in a supervisory position over the last 10 years. Three notarized certificates signed by three different people are needed as proof. You'll also need to furnish a recent credit report and pass a creditcheck. According to the application, you must also "Submit a current financial statement (not more than a year old) prepared and signed by a licensed public accountant or a certified public accountant holding a current permit to practice." The application also states that you must "have and maintain a definite place of business."
It is harder to get a contractor lic in Hawaii than it is to become president of the United States.

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