QUESTION ON How to Use a Certified Constructor License of a Former Employee
My husband and I have an S corporation in the construction field and provide services to licensed contractors by supplying them with skilled laborers in the Masonry field. We have a former employee that has gotten his Certified Contractors license, which my husband nor I have, that wants us to be able to use his license to further our business interests. How do we go about this? Can we just elect him as an officer and then the company can legally work under his license? He does not want compensation for this so I am not sure how to do this legally so that he is protected from tax liability. Thank you for your prompt response.
– Davida McNeal, Hernando County, Florida
Advice by Chrissie Mould
In order to engage in the construction contracting business in Florida, corporations (including S corps) must apply for a Certificate of Authority (also known as a Qualified Business License) through a primary “qualifying agent” with the Department of Business & Professional Regulation. A qualifying agent is a certified or registered contractor and is typically an employee and/or manager of the corporation.
The qualifying agent must have both supervisory authority and final approval authority for all of the construction affairs of the business. If the contractor lacks financial responsibility for the company, the company must designate a Financially Responsible Officer to take financial responsibility for the company. (The Financially Responsible Officer must have a bond in place to insure financial obligations that may result from construction work and complete a Financially Responsible Officer application to be submitted to the Department of Business & Professional Regulation.)
If you hire your former employee and appoint him as an officer of the corporation, you would be able to designate him as the qualifying agent for purposes of obtaining the Certificate of Authority so that the corporation can engage in construction contracting. An employee, by definition, is compensated for services rendered on behalf of the corporation, so you would have to agree on compensation. As an employee of the corporation, his salary would be subject to tax withholding like any other employee.
For the most up-to-date information on Florida construction industry licensing or to obtain an application for a Certificate of Authority (Qualified Business License), visit the Florida Department of Business & Professional Regulation’s web site at http://www.myfloridalicense.com/dbpr/pro/cilb/index.html .
Best of luck!
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- LLC or Corporation?: How to Choose the Right Form for Your Business
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