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#157818 - 01/20/06 06:28 PM assigning license to another company
nov Offline
Member

Registered: 08/08/04
Posts: 70
Loc: New Jersey
I wanted some input on a company using my lic. for electrical work. In NJ I can use my lic with another company by getting the bussiness permit in the companies name instead of mine. I checked with the state and I can pull my lic. at any time and that will void the bussiness permit. This is an established plumbing and HVAC company with a growing customer base. The owner would like to bring the electrical in house so he can stop subbing it out. I currently do not have a bussiness permit but I have a Lic. and I have worked with this owner for almost two years on and off. He cannot guarentee a full weeks work in the beginning so he would have no problem with me working my own jobs in my area. The advantage of this is that he would be incurring the insurance cost. I wanted some opions on if I sould go into bussiness with this person or just let him sub the work out to me. As far as I know he is a stand up guy. Any input would be appreciated

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Business, Office, Estimating, Legal:
#157819 - 01/20/06 07:05 PM Re: assigning license to another company
Redsy Offline
Member

Registered: 03/28/01
Posts: 2138
Loc: Bucks County PA
Would this affect you?
http://www.state.nj.us/lps/ca/proposal/elecpro222.htm

[This message has been edited by Redsy (edited 01-20-2006).]

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#157820 - 01/20/06 07:08 PM Re: assigning license to another company
renosteinke Offline
Cat Servant
Member

Registered: 01/22/05
Posts: 5305
Loc: Blue Collar Country
Nov, I would suggest that you have a nice, long chat with whoever issues your license, as specific rules vary from place to place.

Otherwise, there is a serious problem with your putting your license on the line for someone else. You would likely be exposed to liability for ever wire-nut used by any and all employees of the concern, responsible for all parts purchased, etc.

You're thinking of some sort of partnership, or joint operation? Again, it is time for you to sit down with a lawyer, and an accountant, and see how best to structure things so you don't get caught holding the bag.

Look at it this way: would the other guy accept letting YOU use HIS license?

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#157821 - 01/20/06 07:42 PM Re: assigning license to another company
Celtic Offline
Member

Registered: 02/26/05
Posts: 367
Loc: NJ
I'm a bit confused here Nov...
 Quote:
I currently do not have a bussiness permit but I have a Lic. and I have worked with this owner for almost two years on and off.


I hope that's not electrical work. No BP, no work.

 Quote:
The advantage of this is that he would be incurring the insurance cost.

The disadvantage of this is that he can stop paying the premium at any time...and you might never know.

Who will dictate what type of insurance you carry? Him or you? What if you get a nice fire alarm job? What if (God forbid) you burn a house down that exceeds the insurance limit?

By having him pay the insurance, you leave way too many "unknowns" available.

The link that Redsy left is a proposal...I do not know if it has been accepted.

BUT...

The existing law states:
 Quote:
13:31-3.5 Joint ventures

(a) Where two or more persons form a joint venture for the purpose of contracting to perform electrical work in
New Jersey, each party to the joint venture shall hold a business permit issued by the Board to engage in
electrical contracting in New Jersey.

See: http://www.nj.gov/lps/ca/electric/eleclaws.pdf

Either way - it's looks like a "no go".
_________________________
~~ CELTIC ~~
...-= NJ =-...

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#157822 - 01/21/06 06:46 AM Re: assigning license to another company
Active 1 Offline
Member

Registered: 02/22/03
Posts: 684
Loc: Grayslake IL, USA
Let me start by saying I know nothing about working in NJ.

That said I want to say as far as the insurance companies are concerned ether your an employee of the other company where they take out taxes and pay your insurance (workers comp, unemployment & covered under their liability). Or your a sub for that company. In the second case you would need to give proof of insurance to the other company.

Even when the other company has insurance it does not mean you would be covered under such an agreement your looking at. If your still thinking about it I would talk to a comercial insurance agent on top of the other people listed you should consult. My guess is your answer is no.

"I checked with the state and I can pull my lic. at any time and that will void the bussiness permit."

Do you mean the state can revoke your lic. and void the others business permit for doing what your talking about? If so don't waist any more time you have your answer.

Tom

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#157823 - 01/21/06 09:48 AM Re: assigning license to another company
mahlere Offline
Member

Registered: 11/17/05
Posts: 514
Loc: New Jersey
nov,

i've seen it happen at least a dozen times with 2 particular hvac contractors here in central NJ. In every case, the EC was looking for a cush job, getting paid good money for his license. In every case, the hvac contractor brought the ec in because he wanted to save money. So they always wanted the EC to actually go out an work.

it's usually not a good situation. the best way to do it is to set up a joint venture with the hvac cont. be partners (50/50, 60/40 whatever) define clearly, this is the key part, expectations of all involved.

the problem is you are brand new. you've never run your own business. the hvac cont has been doing this for a while. he is definately looking at you as someone he can manipulate into doing what he wants. if not, he has no reason to bring you in.

by setting up a joint venture, you are an owner not an employee.

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#157824 - 01/21/06 12:04 PM Re: assigning license to another company
Celtic Offline
Member

Registered: 02/26/05
Posts: 367
Loc: NJ
 Quote:
...the best way to do it is to set up a joint venture..


Won't that violate 13:31-3.5 ?
_________________________
~~ CELTIC ~~
...-= NJ =-...

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#157825 - 01/21/06 05:41 PM Re: assigning license to another company
mahlere Offline
Member

Registered: 11/17/05
Posts: 514
Loc: New Jersey
I must apologize. I misspoke.

Not a joint venture, but rather a separate company with them as partners. Open up an EC company, under 1 lic and 1 business permit.

The HVAC contactor will hire the EC and pay the new company. Profits will be split accordingly. HVAC contractor saves some money. EC doesn't have to build a company. If they get work from on outside source it's a bonus.

again, my apologies.

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#157826 - 01/21/06 07:09 PM Re: assigning license to another company
Celtic Offline
Member

Registered: 02/26/05
Posts: 367
Loc: NJ
The safest thing to do, IMHO, would be to just start "Nov Electrical Contracting"...you decide on LLC, Inc, etc.

Have the HVAC call you on as needed basis - just like any other paying customer. If the relationship goes sour - no harm done. If the relationship prospers - still no harm done. Both companies are protected by their own insurance.
_________________________
~~ CELTIC ~~
...-= NJ =-...

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#157827 - 01/22/06 05:12 AM Re: assigning license to another company
mahlere Offline
Member

Registered: 11/17/05
Posts: 514
Loc: New Jersey
 Quote:
"EC doesn't have to build a company"

How does this non existing company, obtain general liability, and workers comp for their employees? something needed to obtain a business permit, and comply with labor laws, also in New Jersey he will have to show that as Lic. holder, he has 51% controlling intrest in this company.



LK, i really was having a tough time yesterday articulating my thoughts. lets' see if today is better.

The following seems obvious to me from Novs post, and my answers were based on these assumptions:

nov has a license, but no BP, therefore no company.

The HVAC contractor does not want to sub out electrical- too expensive

The HVAC contractor wants to find a young licensed electrician, bring him in house, use his license, but not pay him what he's worth. One company comes to mind, i think they are in your area as well, Mid State Plumbing/Heating?etc.

It appears at this time, Nov does not want to really run an EC company. He is looking at the HVAC contractor as a gift horse. Hoping that essentially the HVAC contractor will run the company and Nov will be able to collect a nice salary+

When I say that they should form a company together, that it will allow Nov to "not build a company", what I am referring to is this:

BTW, I am assuming that the HVAC contractor is established and running several trucks if he is contemplating bringing electrical in house.

By forming a company with the HVAC contractor, at whatever % they decide (I honestly have not looked up the BOE rules on this), they could set it up this way:

Nov brings his EC lic, BP, experience and whatever contacts he has.

HVAC cont brings money (insurance, existing employees when needed to sub to new company, etc)

I am also guessing that there is enough electrical work needed by the HVAC contractor that they will not have to go out and solicit other work. Hence the reason the HVAC contractor wants to bring an electrician in house.

So, they will form a company as partners and perform electrical installations primarily for the HVAC company.

This will allow Nov to not have to build a business. It will allow the HVAC contractor to save some money. And it might be the only way that Nov can go into this deal without getting himself royally screwed.

Does any of this make sense?

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