CFC Business Operations & Licensing Flashcards
6 cards from real CFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFC Business Operations & Licensing flashcards as text
What is a mechanic's lien in the context of fence contracting?
Answer: A security interest claimed against property for unpaid work or materials
A mechanic's lien allows a fence contractor to claim a legal interest in the property when a client fails to pay for completed work or supplied materials.
A Certificate of Insurance (COI) is provided to clients primarily to:
Answer: Verify the contractor carries active insurance coverage
A COI is a document issued by the insurance company confirming the contractor has active, valid coverage for the policy types and limits listed.
Which business structure provides the most personal liability protection for an individual fence contractor?
Answer: Limited Liability Company (LLC)
An LLC separates personal assets from business liabilities, so the owner's personal property is generally protected if the business faces a lawsuit.
When a fence contractor hires subcontractors, who is typically responsible for ensuring subcontractor compliance with safety regulations on the job site?
Answer: The prime or general contractor
The prime contractor retains overall responsibility for site safety and must ensure all subcontractors comply with applicable OSHA and safety standards.
A bid bond submitted with a fence project bid guarantees that the contractor will:
Answer: Honor the bid price if awarded the contract
A bid bond ensures the contractor will enter into the contract at the submitted price if selected, protecting the project owner from bid withdrawal.
Which tax form must a fence contractor issue to independent subcontractors paid $600 or more in a single calendar year?
Answer: 1099-NEC
The 1099-NEC form reports nonemployee compensation paid to independent contractors and must be issued by January 31 of the following year.