Alabama Administrative Code › Title 230 - STATE OF ALABAMA LICENSING BOARD FOR GENERAL CONTRACTORS › Chapter 230-X-1 - CONTRACTORS › Section 230-X-1-.02 - Requirements For Bid Limits

Current through Register Vol. 42, No. 9, June 28, 2024
(1)
Minimum Net Worth/Working Capital
. All applicants must
					have a net worth and working capital of at least $10,000 as shown by the
					applicant's most recent financial statement (less than one year old) in order
					to qualify for the lowest bid limit classification. Except for licenses
					qualifying as "unlimited", an applicant's maximum bid limits shall be set by
					the formula of not more than ten times either the net worth or working capital,
					whichever is the lesser amount.
(2)
Line of Credit to Increase Working Capital
.
					Verification of a line of credit, from a state or federal chartered bank or
					savings association, to the general contractor to increase working capital,
					must be submitted to the board in the format provided by the board. Lines of
					credit meeting board requirements will be added to the working capital shown in
					the contractor's financial statement.
(3)
Personal Financial Statements
					to Increase Net Worth or Working Capital
. Contractors must meet
					the minimum requirements of 230-X-l-.02(a), Requirements for Bid Limits, may
					submit a personal financial statement to increase their net worth or working
					capital. Any personal financial statement or parent company financial statement
					submitted for the purpose of increasing the bid limit of a license shall not
					include the value of the ownership which will not be considered. A personal
					financial statement with completed guarantee agreement as provided by the board
					may be used to increase the working capital or net worth of a contractor to
					increase a bid limit by one step. All personal financial statements must be
					signed by both husband and wife and notarized. The following applies according
					to the entity holding the general contractors license:
(a) Sole Proprietor: A notarized guarantee
					agreement (signed by both husband and wife) with a personal financial statement
					prepared by a CPA will be considered to increase a bid limit by one step. Note:
					A sole Proprietor may submit a personal financial statement only when personal
					items (home, furnishings, etc.) are not included on the applicant's business
					statement.
(b) Partnerships: A
					notarized guarantee agreement (signed by both husband and wife) and personal
					financial statement prepared by a CPA and submitted by any partner(s) will be
					considered to increase the bid limit of the partnership by one step.
(c) Corporations: A parent company's
					financial statement or a personal financial statement prepared by a CPA for a
					majority stockholder(s) of the corporation may be submitted to increase the bid
					limit of the corporation by one step. All personal financial statements must be
					submitted with a notarized guarantee agreement (signed by both husband and
					wife). The guarantee agreement submitted with a parent company's financial
					statement must be signed by a majority stockholder of the parent company and
					notarized.