Replies

1. 
   user-253201 | Jan 17, 2009 08:54pm | #1

   Purple

   Start with the insurance company you use for your car or any other ins. broker.

   You will probably need a FEIN #(federal employers id number).

   You will probably need to file ' fictitious name act' papers with your county.

   In Illinois, plumbers and roofers are licensed by the state, and require a bond.

   A bond is issued by your insurance carrier, and basically guarantees your performance, ie; say you do some work under a permit and the AHJ does not like it and you are unable or unwilling to fix it, then the insurance company will fix it and come back after you to collect their costs.

   Illinois does not license general or remodeling contractors, but most cities and counties will require there own lis. and perhaps a bond.

   Electrical work will require a lis. and usually a bond. some larger cities (Chicago,Naperville) issue licensees and most other cities will accept the lisc. , but may require a bond for their city.

   I have also found that most AHJ are now looking for their city to be named as 'an additional insured' on your policy ( when this was a new concept my carrier did it for free, but as the practice spread they now charge me for this rider)

   Hope this helps

   Rich

2. 
   jonblakemore | Jan 18, 2009 12:16am | #2

   Just out of curiosity, what makes you think you have to be bonded? Is it a requirement by the state, municipality, or your customers?

   The only reason I ask is because bonding, unlike other forms of insurance, is typically a case by case arrangement. You get bonded to prove to your customer that you will be able to perform according to the contract, or that you will pay all of your suppliers and subs according to the contract. And all of that costs money, sometimes around 3% of a project cost.

   My experience with bonding, albeit limited, is that most residential and small commercial customers are really just asking if you are appropriately insured when they ask about "bonding".

    

   Jon Blakemore

   RappahannockINC.com Fredericksburg, VA

1. 
   EricPaulson | Jan 18, 2009 01:50am | #3

   The county I live in requires some type of bond for a licence; at least they used to. 

3. 
   LIVEONSAWDUST | Jan 18, 2009 06:18am | #4

   I dont know about the specific laws in your state regarding insurance,bonding and liscense requirements, but as far as forming a business you already are a "business" as soon as you enter into any agreement to perform work (you are a sole proprietor) and this is perfectly legal.The problem with this is that all your personal assetts could possibly be attached in the event of a lawsuit. Forming a seperate business entity such as a corporation can (but not necessarily will) protect your personal assetts. In my state a limited liability corp. (LLC) can be formed by filing a form for 50.00 and an annual 20.00 filing fee. That is the way most contractors here operate because for tax purposes it is treated the same as a sole proprietor. If you have an accountant they can probably advise you how to proceed