starting out......

[sparky 134]

I have a few questions regarding starting an electrical contracting company. I have been an electrician for the past 9 years and I do have my electrical license. I am located in Illinois.

I would like some opinions/suggestions on the amount and type of insurance other contractors are carrying.

Also, after completing the process of becoming a corporation, how would I go about "selling" my tools, van, etc. to the corporation. My reasoning for this is to lower the profit the corp. makes in the first year. Or would I be better off leasing my van to the corp. ?

And as always, any other advice is greatly appreciated....

Bill

[ August 26, 2004, 07:15 AM: Message edited by: sparky 134 ]

 

[luke warmwater]

Re: starting out......

I don't know if Ill. has a minimum amount that you must carry.
DE min. is $300,000.
We carry $2 million.
Some jobs will require a minimum just to bid. Usually $1 million, but sometimes 2.

You can sell your tools and vehicle to the company.
Your accountant should be able to help with what is best for your situation.

 

[hbiss]

Re: starting out......

Usually your contractors license will require a certain amount of insurance and possibly a bond.

As for a corporation, there are several types. It's imperative that you consult with an accountant as to the one most suitable for you. They will also be able to advise on your question about the transfer of property. In some states there are tax issues such as sales tax on such transfers.

This brings up another point- make sure you register with you state sales tax bureau (or whatever you call it in Illinois) to collect sales tax on jobs that require it to be collected- such as repairs. Your accountant can advise and take care of this too. Good luck!

-Hal

 

[active1]

Re: starting out......

We have $500k in think each occur $1 mil max. I see some prints ask for $1 mil each occur but no one checks. Some villages might be $500k to work in. I think they are more concerned with you having insurance than the amount. A number of public for bid jobs want you to have a lot of insurance maybe $2 mil. Plus they want a high coverage on your trucks. It might be difficult to get that work from day 1 so I would just go with $500k.

Your trucks should get comercial coverage. It does cost more and give more coverage but it is not outragous. Their may be ways around it but it is better to just bite the bullit. A lot of insurance companies don't want a new business. Just keep shopping.

You are probibly better off talking to an accountant from day 1 instead of letting things get all messed up and paying him to go back a few years to figure things out. My accountant gets $150 per month. He ballances the account, books, taxes, and payrole. I was paying $120 a month before just for the payrole service. You should have a business checking account to try to keep money seperate. You should seek the advice of an accountant about you business type. A corporation is more involved. You have to have a registered agent (attorney) with Illinois secritary of state. That attorny gets paid every year to be registered with you. He should have anual board meetings and other things. The corporation is taxed. Than you are taxed on what you put in your pocket. You are double taxed. I might be off a bit on this all I'm saying is talk to an accountant not an attorney.

A lot of villages want you to get a bond work. Many ask for a fee of $25-$75 to work in. It is not permitted under IL law but they still require it so what are you going to do.

Where did you get your liciance from?
What area or towns do you want to do work in?
Do you have work, advertising, or general contractors lined up? In my opinion their is some work in Northern IL but the market is weak.
One indicator is how many union guys are out of work. Another is the prices and work I'm getting. I will be lucky to break even this year.
Sparky 134, you wouldn't be in local 134? If so would that make a differance?

Tom