FHB Logo Facebook LinkedIn Email Pinterest Twitter X Instagram Tiktok YouTube Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe
Log In
  • How-To
  • Design
  • Tools & Materials
  • Restoration
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
Log In

Discussion Forum

Discussion Forum

Starting Construction company in NY

bm3301 | Posted in Business on August 18, 2008 05:09am

Hello to all, ive been working in the construction industry for 10 years and am looking to start my own small construction company, doing mostly renovation and finish work. It really would only be to get a license and have insurance to protect myself on my own work as a currently am finishing up a construction management degree and work freelance for a large construction company. I would just like to put all the pieces in place now for me to go out on my own when the time is right.

I was wondering if theres anything i should know about doing a start up here in new york and what i should be aware of? also should i do a sole proprietorship or LLC?

Any information would be greatly appreciated

 

Thank you

Reply
  • X
  • facebook
  • linkedin
  • pinterest
  • email
  • add to favorites Log in or Sign up to save your favorite articles

Replies

  1. frammer52 | Aug 18, 2008 05:45pm | #1

    Where abouts in NY?

  2. Jim_Allen | Aug 18, 2008 05:47pm | #2

    Welcome to BT bm3301.

    You've landed in a good place to learn about start ups. How far out is "the time is right?" It sounds like you are currently doing work as an independent contractor. If so, "the time is past"; meaning, you've already started!

  3. User avater
    Gene_Davis | Aug 18, 2008 06:29pm | #3

    You had better go and talk to a good insurance agent.  New York is the most expensive state in the country for the kinds of liability policies needed by builders.

    I know because I live in Essex County. 

    It can be quite a bit less to have insurance when operating as a specialty subcontractor, but a GC of the type to do new residential or major remodeling might expect to have annual premium cost in the range of $30,000 for GL.

    There will be severe limits placed on how much can be subcontracted, also.  The limits would prevent the type of "paper GC" businesses common almost everywhere, in which a new-construction GC subs framing and trim carpentry, plus of course sitework, excavation, foundation-building, plumbing, electrical, painting, drywall, roofing, sheet metal, HVAC, and more, concentrating only on management, supervision, scheduling, and some in-between stuff his lead guy (or himself) can do.

    Operating under these strict rules, I had to hire direct labor to do foundation building (using ICF blocks), do absolutely everything carpentry-wise, do the roofing, a lot of the painting, insulating, and more. 

    What makes it really tough is that the established GCs, who got started 10 years ago or more, don't have these kinds of premiums, nor are they limited so much (if at all) on how much of a package they can subcontract.

    LLC is the way to go, and be sure to take the Sub-S option, tax-wise.

     

    View Image

    "A stripe is just as real as a dadgummed flower."

    Gene Davis        1920-1985

    1. bm3301 | Aug 18, 2008 10:38pm | #4

      On long island

  4. MikeSmith | Aug 19, 2008 12:00am | #5

    bm.. i would not do sole prop.

    and i'd talk to a business lawyer & accountant before deciding wether to go S-corp or LLC

    we decided on  S-corp.. but that was in '99 and LLC's were relatively new then

    incorporating is worth the hassle & expense compared to sole prop.... IF you intend to really pursue a successful business

    Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
  5. vintage1 | Aug 19, 2008 01:31am | #6

    My understanding of the situation is this:

    LLC can help you with some of the liablility/ insurance issues but doessn't help with how the gov't taxes your income v. profits.

    A S corp can be more expensive to establish, is harder to get out of/close if you decide to take another route, but it may help lower your taxable income.  It also helps protect your personal assets, should you become involved in litigation.

    Talk with a local accountant or tax attorney to see what suits your needs.  I see many guys in my area with LLC at the end of the company name, but I don't think it offers quite as much protection as what they think it does.

     

    1. Jim_Allen | Aug 19, 2008 02:01am | #7

      "I see many guys in my area with LLC at the end of the company name, but I don't think it offers quite as much protection as what they think it does."I think the worry about asset protection is overrated for tradesmen. If you don't make anything, there's nothing to protect.

      1. MikeSmith | Aug 19, 2008 02:40am | #8

        au contraire... if you own a house...  a good lawyer can pierce the llc veil and  go after your personal assets too

        commingling funds can really cloud the issue

         Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore

        1. User avater
          Gene_Davis | Aug 19, 2008 03:02am | #9

          Take it from a New Yawker, LLC with S is better than INC with S.

          NY has far different franchise fee schedules for corps versus LLCs, and LLC annual cost are lower, particularly if the LLC has assets beyond just equipment and tools.

          The LLC is less expensive to dissolve, also, when needed.

          I cannot speak for business costs in other states outside NY. 

          View Image

          "A stripe is just as real as a dadgummed flower."

          Gene Davis        1920-1985

          1. User avater
            jonblakemore | Aug 19, 2008 03:16am | #11

            I've never heard of a LLC Subchapter S. What does that mean? 

            Jon Blakemore RappahannockINC.com Fredericksburg, VA

          2. User avater
            BillHartmann | Aug 19, 2008 03:45am | #15

            "I've never heard of a LLC Subchapter S. What does that mean?"There really isn't anything.Corporations, if the meet the requiremsnts, can elect to be treated according to sub-chapter S. In that the, for tax purposes, it is treaded as a sole proprietor.For LLC, for a single owner it defaults to being treated as a sole propritor, but you can treat it as a corp.http://www.irs.gov/faqs/faq12-1.html.
            .
            A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.

          3. User avater
            Gene_Davis | Aug 19, 2008 04:00am | #17

            I stand corrected.  In taxation, LLC members benefit in the same way as do shareholders in an S corp.

            An LLC does not file for Sub S status.

            I have both types of biz entities in NY, S corp and LLC. 

            View Image

            "A stripe is just as real as a dadgummed flower."

            Gene Davis        1920-1985

        2. Jim_Allen | Aug 19, 2008 03:03am | #10

          Your assuming that most tradesmen GC's will make enough to own a house. Most of the tradesmen Gcs' I know can't even get a mortgage on the house. Let not drag this argument out too much, I was being facetious, as normal. One thing I learned about TX. If you win a lawsuit in TX, you can't garnishee wages, you cant take the the house, you can't take the truck, you can't take the tools. Good luck collecting eh?

          1. vintage1 | Aug 19, 2008 03:17am | #12

            Most of the tradesmen Gcs' I know can't even get a mortgage on the house.

             

            Jim,

            I don't want to start an argument here either, and maybe I am having a problem with the terminology, but am I understanding this right?  Are you saying most tradesman you know can't get a mortgage?

            While I find that there are many challenges to this business and not all of us are comfortably in the 6 figure income bracket, virtually everyone of my contemporaries, colleagues, and subcontractors have a mortgage on their house.  Most I know, do well for themselves and their families.

            Many of them have significantly more than that!

          2. Jim_Allen | Aug 19, 2008 03:20am | #13

            I've already stated that I'm being facetious. You have to remember that my recent history has me going down the tubes in MI where the guys running GC businesses and using their trade as the main service are going down the tubes at an alarming rate.

          3. vintage1 | Aug 19, 2008 03:37am | #14

            Jim,

            Fair enough.

            Like I said, didn't want to start an arguement.  Just struck me as odd.

            I have often said, "you cannot convey tone in an email". 

            I think you pointed this out in another post earlier this week, talking about all the LOL and ;) we have to put in to get the point across.

             

          4. Jim_Allen | Aug 19, 2008 03:55am | #16

            I'm not real good about adding the lol's and smiley faces. I think it's part of my real life dry humor style. But, I never take offense at the idea that someone would start an argument so feel free anytime to challenge anything I say. I do prefer that the argument stay on topic and not get personal though. So, argue away but please don't call me a moron....I've already gotten that enough to know it's true but theres no such thing as elevated levels of moronism.

          5. User avater
            intrepidcat | Aug 19, 2008 06:07am | #18

            So, argue away but please don't call me a moron....I've already gotten that enough to know it's true but theres no such thing as elevated levels of moronism.

             

             

             

            ROFLMAO

             

             

             "Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck 

          6. frammer52 | Aug 19, 2008 11:19pm | #19

            Jim,NC is the same.

          7. blownonfuel | Aug 19, 2008 11:50pm | #20

            Anna Nicole thought so.

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

Video Shorts

Categories

  • Business
  • Code Questions
  • Construction Techniques
  • Energy, Heating & Insulation
  • General Discussion
  • Help/Work Wanted
  • Photo Gallery
  • Reader Classified
  • Tools for Home Building

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Up Next

Video Shorts

Featured Story

FHB Summit 2025 — Design, Build, Business

Join some of the most experienced and recognized building professionals for two days of presentations, panel discussions, networking, and more.

Featured Video

Micro-Adjust Deck-Baluster Spacing for an Eye-Deceiving Layout

No math, no measuring—just a simple jig made from an elastic band is all you need to lay out a good-looking deck railing.

Related Stories

  • Podcast Episode 692: Introduction to Trade Work, Embodied Carbon, and Envelope Improvements
  • FHB Podcast Segment: Embodied Greenhouse Gas Emissions and the Building Codes
  • Old Boots Learn New Tricks
  • Install Denim Insulation Like a Pro

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Fine Homebuilding Magazine

  • Issue 332 - July 2025
    • Custom Built-ins With Job-Site Tools
    • Fight House Fires Through Design
    • Making the Move to Multifamily
  • Issue 331 - June 2025
    • A More Resilient Roof
    • Tool Test: You Need a Drywall Sander
    • Ducted vs. Ductless Heat Pumps
  • Issue 330 - April/May 2025
    • Deck Details for Durability
    • FAQs on HPWHs
    • 10 Tips for a Long-Lasting Paint Job
  • Issue 329 - Feb/Mar 2025
    • Smart Foundation for a Small Addition
    • A Kominka Comes West
    • Making Small Kitchens Work
  • Issue 328 - Dec/Jan 2025
    • How a Pro Replaces Columns
    • Passive House 3.0
    • Tool Test: Compact Line Lasers

Fine Home Building

Newsletter Sign-up

  • Fine Homebuilding

    Home building tips, offers, and expert advice in your inbox.

  • Green Building Advisor

    Building science and energy efficiency advice, plus special offers, in your inbox.

  • Old House Journal

    Repair, renovation, and restoration tips, plus special offers, in your inbox.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters

Follow

  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X
  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences
  • About
  • Contact
  • Advertise
  • Careers
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2025 Active Interest Media. All rights reserved.

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

  • Home Group
  • Antique Trader
  • Arts & Crafts Homes
  • Bank Note Reporter
  • Cabin Life
  • Cuisine at Home
  • Fine Gardening
  • Fine Woodworking
  • Green Building Advisor
  • Garden Gate
  • Horticulture
  • Keep Craft Alive
  • Log Home Living
  • Military Trader/Vehicles
  • Numismatic News
  • Numismaster
  • Old Cars Weekly
  • Old House Journal
  • Period Homes
  • Popular Woodworking
  • Script
  • ShopNotes
  • Sports Collectors Digest
  • Threads
  • Timber Home Living
  • Traditional Building
  • Woodsmith
  • World Coin News
  • Writer's Digest
Active Interest Media logo
X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Project Guides
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Online Learning

  • Courses
  • Project Guides
  • Reader Projects
  • Podcast

More

  • FHB Ambassadors
  • FHB House
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • X
  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 70%

Subscribe

Enjoy unlimited access to Fine Homebuilding. Join Now

Already a member? Log in

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in

Privacy Policy Update

We use cookies, pixels, script and other tracking technologies to analyze and improve our service, to improve and personalize content, and for advertising to you. We also share information about your use of our site with third-party social media, advertising and analytics partners. You can view our Privacy Policy here and our Terms of Use here.

Cookies

Analytics

These cookies help us track site metrics to improve our sites and provide a better user experience.

Advertising/Social Media

These cookies are used to serve advertisements aligned with your interests.

Essential

These cookies are required to provide basic functions like page navigation and access to secure areas of the website.

Delete My Data

Delete all cookies and associated data