Legal Definition of a General Contractor
Licensing requirements for legal work on construction projects vary from region to region. In the United States, it is the responsibility of states to define these requirements: In the state of California, for example, the requirements are as follows: Experience in the construction industry as well as references from clients, business partners or former employers are required. Some jurisdictions require applicants to provide proof of funding to own their own general contractor business. Up to this amount, the general contractor is granted a supplement of up to seven and a half percent (7.5%) on the work of subcontractors. Getting paid for a construction project is one of those things where details are really important, and one of those details that is very important is the role that the party in question plays in the project. “General contractor”, “subcontractor”, “material supplier” and “owner” are examples of possible roles in a construction project (although there are many more, of course). There are many, many examples of construction companies acting as general contractors on certain projects and contracts (when hired directly by the owner) while being subcontractors for other engagements (when hired by someone other than the owner). When it comes to getting paid, this distinction is very important, as we will see in the next section. General contractors often employ subcontractors to perform tasks related to specific areas of the contract. The general contractor supervises the work of the subcontractors and ensures its quality. General contractors often start out as construction workers.
As they gain work experience, they learn various aspects of construction, including masonry, carpentry, framing and plumbing. Aspiring general contractors communicate with subcontractors and can gain the management skills they need to run their own business. Numbers 2) and 3) go hand in hand and represent a challenge for GCs. Typically, general contractors can only “see” the first step of subcontractors or parties with whom they contract directly and have little fear of risk. The real risk to the GCs is fear of the unknown coming from parties they cannot see. These invisible parties include subcontractors, suppliers and other persons involved in the project with whom the GC has no visibility or direct line of communication. In short, the GCs must be responsible for the entire project payment chain. In the United Kingdom and some countries of the British Commonwealth, the term “prime contractor” was gradually replaced by “prime contractor” in the early twentieth century.  This was the term used by large professional, commercial and consumer organizations when contracting for work and, therefore, the term “prime contractor” was no longer used, except in large organizations where the prime contractor is the senior manager and a prime contractor shares responsibility with professional contractors. In the United States, there are no federal licensing requirements to become a general contractor, although most states require general contractors to obtain a local license to operate.  Some general contractors obtain a bachelor`s degree in building science, building science, surveying, construction safety or other disciplines. A property owner or developer develops a program based on their needs and chooses a location (often with an architect).
The architect assembles a design team of consulting engineers and other experts to design the building and specify the building systems. Today, contractors often participate in the design team by providing pre-design services, such as budget estimates and planning requirements, in order to improve the profitability of the project. In other cases, the general contractor is commissioned at the end of the planning phase. The client, architect and general contractor work closely together to meet deadlines and budgets. The general contractor works with subcontractors to ensure quality standards. However, in this article, we will provide you with the definition of general contractor in relation to the construction industry. There isn`t enough space here to talk about all the payment challenges that general contractors face in their projects. However, this does not mean that we do not understand the challenges. If you are a GC and would like to see how your payment process could be faster, easier and less stressful, click on the banner below to contact us.
Our construction payment experts are at your disposal and eager to see how they can help you. Safety on site is a top priority for the general contractor. Here is the best definition of general contractor for the construction industry: The term “contractor” is used in many different industries. You can employ “entrepreneurs” for all types of businesses, from the largest Fortune 500 companies to the smallest startups or family-owned startups. Sometimes the term refers to an individual (the term “independent contractor” is often used; while at other times, a contractor may refer to an entire business taking work on a contractual basis. A general contractor is responsible for providing all materials, labour, equipment (for example, technical vehicles and tools) and services necessary for the construction of the project.