New Construction, Business License and State Contractor License #

[Justin Mcintyre]

Hello community.  New member here.  I guess i should have posted in the new member spot first, but as with everything else I'm eager to learn as quickly as possible (I'll head over there next).

 I am in the process of setting up a teaming agreement with a GC here in Virginia to manage the building of two new spec. homes this year.  I called the local county commissioner today to go about getting a business license to operate in the county and ran into a bit of a road block.  As it stands in this particular county, one must posses a State Contractors license in order to apply for a business license to build and resell new homes. You can not reference a contracted company/entity with said state contractors license in order to do so. No one within my company has a GC license nor do we intend to hire a GC as a W-2 employee or responsible manager.  I understand that my GC with whom I am partnering with has the required business license and state contractors license to pull building permits and operate within the county and state.  However, here is my problem.  It was actually our intention to pay the GC a commission of investor profits to manage the project and pull permits for each project while we would handle paying for materials and sub-contractor labor.  At the end of the year, someone would need to report the gross receipts to the county commissioner such that the taxes can be collected.  This is completed via the business license costs in the county each year.  So , at the end of the year if our business has collected a payment for the sale of these homes, we would thus be the entity that has conducted business in this particular county and as such would be responsible for attaining the business license. But as i have learned, no state contractor license ='s no business license.  

I understand that I've spoken in circles and for that I apologize.  Maybe the only option i have here is to pay my GC on a cost plus commissioned rate for the home-building activity?  I would be re-reimbursing him in this manner, but it is my company which will hold the construction loan.  And thus I feel that I'm in a chicken/egg situation.  No doubt this is due in part to my ignorance of the situation.

As it relates to the TA I am forming, I'm not sure of the best course of direction to take here as to build a good solid direction to take this relationship in that is profitable and legal for all parties.  I would love to hear some feedback on perspective paths of success from those that have and are operating in this fashion today.

Thanks in advanced!

Justin McIntyre,