A general contractor is a person who contracts out work to other professionals, sometimes including subcontractors. A general contractor, principal contractor or sub-contractor is typically responsible for the day-to-day supervision of a commercial construction site, coordination of trades and vendors, and communicating details to all involved parties during the course of a commercial construction project. These individuals are called general contractors because they typically manage everything associated with commercial construction, including the supervision and bidding aspects of contracts and the overall management of the construction project. However, it can be difficult to determine if you are working with a general contractor or a subcontractor. Below, you will find several key differences between the two.
One important distinction is in the licensing process. All contractors need to obtain a general contractor’s license before they can legally perform work on residential or commercial property. There are different requirements across different states, but most require passing a comprehensive written examination as well as meeting financial and business obligations, such as obtaining liability insurance. Additionally, licensed contractors must meet various continuing education requirements each year. Finally, all licensed contractors must undergo a thorough background investigation to make certain that they have no past complaints or negative references. In addition, most states require future workers to be re-licensed if they later become dissatisfied with their performance or wish to change jobs.
While all construction projects involve some degree of interaction between contractors and subcontractors, not all interactions are equal. For example, a general contractor will likely hire subcontractors to complete specific tasks that are outside of their area of expertise, such as painting or floor finishing. In contrast, a general contractor will hire directly. General contractors rely on sub-contractors to perform tasks that are outside of their area of specialization. In order to effectively control subcontractor projects, a general contractor will have access to detailed records that allow them to quickly identify problems areas. This enables the general contractor to better control costs and reduce waste.
Unfortunately, in some cases it is difficult for contractors to control who they hire. A general contractor will often hire subcontractors from the same business that they are working for, which means that the business may be paying subcontractors for work that is already done by them. As a result, in the long run, a business may pay more than it would for a single independent contractor. As a result, if a business hires more subcontractors than it needs, it is wasting money that could be used for more immediate projects or increasing its capital stock.
The primary way that a general contractor may include subcontractors is by using a system of bidding for jobs. However, depending on how extensive a general contractor’s network, it may include other ways to acquire sub-contracts. For example, if a general contractor buys materials from a competitor and sells them to another company, the contractor may enter into an agreement with the buyer to sell those materials at a discount. In this way, a general contractor may include several different types of subcontractors within their overall organization, although each of those may not necessarily be sub-contractors of the others.
This means that any company that wishes to incorporate as a subcontractor must first obtain a general contractor license. This type of license comes in different forms and must be renewed periodically in order to keep it active. A recent study shows that almost 90 percent of the general contractors currently licensed in North America are not up to date on their licensing, which is why many construction projects never get started. Therefore, if you are in the business of construction, it is extremely important to get your general contractor license as soon as possible, so that you can legally do your job and put yourself in the best position for success. After all, you’ll be responsible for many construction projects, so it only makes sense to do everything in your power to make sure that you’re on the right side of the law.