Masonry Magazine May 1966 Page. 7
when you travel...STOP,
LOOK and
READ...
By Peer Pedersen
This summary of various local requirements which might effect the business operation of a Mason Contractor has been prepared by MCAA Legal Counsel.
A contractor usually has no difficulty meeting the requirements which his home state or municipal government might impose upon him before he qualifies to submit a bid on various types of contracting jobs. The fact that he is a resident and that he is generally familiar with local regulations regarding such matters, usually obviates this problem.
However, unknown local requirements and legal pitfalls may arise when the unwary contractor decides to bid on work outside his home state. Though the work he plans to do might be similar to other jobs or projects performed at home, the laws of the foreign state under which such work will be awarded and completed might be entirely different. Hence, failure to properly comply with such local requirements could result in the loss of a contract that might otherwise have been awarded to such foreign contractor.
At present, twenty-nine (29) states require that some foreign prospective contractor-bidders obtain from such states a contractor's license. Such license requirement is generally applicable to any firm, partnership, corporation of any combination thereof and is usually dependent upon the type of construction work in which the applicant is engaged, together with the dollar amount of the contract in question. The statutes describe in detail the person with whom such application is to be filed, the amount of the license fee, the term of the license, whether or not an examination is required of the applicant, the bond requirements, if any, and in general, the contractors covered by such legislation. The states presently requiring some form of contractors' licenses are:
Alabama
Florida
Kansas
Arizona
Georgia
Kentucky
Arkansas
Hawaii
Louisiana
California
Idaho
Maryland
Delaware
Indiana
Michigan
Mississippi
North Carolina Utah
Montana
North Dakota
Oregon
South Carolina
Tennessee
Virginia
Washington
Wyoming
In addition to a contractors' license, further requirements may have to be met if a certain contractor hopes to be a successful bidder. At present, there appears to be no state with legislation specifically providing that at the time it submits its bid, a foreign corporation must be qualified to do business in that foreign state.
However, there are several states that have laws which in effect are tantamount to requiring a corporation to be qualified to do business in the foreign state before they can ultimately be a successful bidder. For example, in North Dakota, a corporation which submits a bid or offer to construct any part or portion of a public or private building, road, airport, or other installation, must not only obtain a contractors' license, but also must file a "notice of intention to do business in the State" with the Secretary of State. In Louisiana, no contractors' license may be issued to a foreign corporation which has not obtained a certificate of authority to do business in such state which is issued by the Secretary of State. In Alabama, Arizona, California, New Mexico and Virginia, a foreign corporation must state it is qualified to do business in such states when applying for certain contractors licenses. In addition, in Virginia, an unlicensed foreign corporation, before bidding on any contract, must under the State General Contractors' License requirements, appoint the Secretary of the Commonwealth as its agent for service of process.
The policy behind such conditions precedent are obvious. Naturally, the foreign state desires to protect its own resident contractors and also desires to set construction standards on foreign bidders at least as high as are required of its own contractors. In addition, the general public must be protected in the event of neg-