Utah Contractor Business and Law Exam 2026
Setting Up A Business in Utah 1-1 (Business Structure)
- Register the business in Utah with the Department of Commerce Division of
Corporations and Commercial Code.
- To form an entity use the One Stop Business Registration Process
(www.corporations.utah.gov)
- An entity formed in Utah is considered domestic. An entity formed outside of Utah
must register as a foreign entity.
Sole Proprietorship 1-1, 1-2, 1-7 (Business Structure)
- Flexible because the structure is ONE PERSON with complete authority and full
liability.
- The individual operating the business in the model reports income with
SCHEDULE C AND FORM 1040.
Advantages: Simplicity and Easy Transfer of Ownership
- No formal action to start-up
- Sole Proprietors with no employees needs no EIN from the IRS
- Sale of business is at discretion of the owner
Disadvantages: Unlimited personal responsibility.
- Personally responsible for all debts and obligations.
- Personal assets can be used to satisfy debts.
Partnerships 1-2, 1-3, 1-7 (Business Structure)
- Agreement between two individuals and based around contributing some asset.
- Each Partner shares in the profits and loses of company.
Advantages: Limited Partnerships
- A limited partner's financial responsibility is limited to liabilities of the business.
Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation 1-3, 1-4, 1-7 (Business Structure)
- Limited to 100 persons
- Only one class of stock
- File taxes under form 1120s
ADVANTAGES:
- Liability protection: S corps hold all business liability.
- Tax Benefits: only wages are subject to employment tax.
DISADVANTAGES:
- Increased regulation: S corps require routine meetings with minutes taken at the
meeting.
- Restriction of Ownership: restricted on size and membership
C Corporation 1-4, 1-5, and 1-7 (Business Structure)
- An independent legal entity owned by shareholders but the shareholders are not
liable for the actions and debts of the corporation.
- Corporations use form 1120 or 1120-A income tax return
Advantages:
- Liability Protection: corporations create a new legal entity.
- Stock: able to issue stocks, and ownership is transferred through sale of stocks.
- Tax Advantages: corporations file taxes separate from the owners
Disadvantages:
- Double Taxation: Corporate profits are taxed at corporate level and when
dividends are paid to shareholders.
Limited Liability Company 1-5 and 1-7 (Business Structure)
- Entitiy formed under state law by filing articles of organizations. An LLC may be
classified for tax purposes as a partnership, cooperation, or entity disregarded as an
entity separate from its owner by applying the rules.
- No tax paid at entity level. Profits and losses are passed through to the members.
General Liability 2-1 (Insurance/Bonds)
- General Liability Insurance is issued to protect against liability claim for bodily
injury and property damage arising out of premises, operations, products, and
completed operations.
- Liability insurance is designed to offer specific protection against THIRD PARTY
(NON EMPLOYEE) INSURANCE CLAIMS.
, Utah Contractor Business and Law Exam 2026
Umbrella Liability 2-2 (Insurance/Bonds)
- Coverage thats can provide additional limit over the underlying primary policy.
- It may have a broader definition of coverage and help fill gaps in coverage.
Property Insurance 2-2 (Insurance/Bonds)
- Commercial property insurance protects the property of the business, such as the
buildings and equipment. Often property insurance policies are written to cover
specific risks, such as FIRE insurance, FLOOD insurance, or EARTHQUAKE
insurance. These are called NAMED PERIL OR ALL-RISK POLICIES.
Certificate of Insurance 2-2 (Insurance/Bonds)
- The insurance company providing coverage wants a certificate of insurance
because it helps necessitate that the risk be shared WITH EACH PARTICIPATING
ENTITY.
- You need a certificate of insurance to get licensed.
- the coverage needs to be $100,000/incident and $300,00 in total.
- The DOPL is the certificate holder.
Contract Surety Bonds 2-3 (Insurance/Bonds)
- Government project bonds are governed by law. Federal government projects are
governed by the "Miller Act," which dictates that performance and payment bonds
are required for all federal construction projects over $100,000.
Types of Bonds 2-3 (Insurance/Bonds)
Bonds provide a guarantee to the project owner
- Bid Bond: Guarantees that the bidder will complete the work.
- Maintenance Bond: Protects owner against defects in materials and work.
- Payment Bond: Guarantees that the contractor will pay all subcontractors and
suppliers.
- Performance Bond: contractor will complete the project.
Independent Contractors - Licensure and Exemptions 2-3, 2-4 (Insurance/Bonds)
- Independent Contractor is an individual who controls what will be done and how it
will be accomplished.
- The IRS examines three categories when defining someone as an independent
contractor: BEHAVIORAL CONTROL, FINANCIAL CONTROL, AND TYPE OF
RELATIONSHIP.
- A business owner is required to provide a FORM 1099 for each independent
contractor who they paid $600 or more during the year.
Worker's Compensation Insurance Requirements 2-4, 2-5 (Insurance/Bonds)
- The fact that all employees must be covered puts some level of liability on general
contractors to have EVERY WORKER ON THEIR SITE INSURED.
- If the IRS defines a worker as an employee the insurance is paid by the contractor.
- If the worker is a sub-contractor then the premiums can be paid by the
subcontractor.
- The general contractor assumes responsibility to COLLECT CERTIFICATES OF
INSURANCE for each sub-contractor or the lability will shift to the general
contractor.
- An employer is required to report an injury on Form 122 Employer's First Report of
Injury and Illness, to the insurer within 7 days. the insurer reports the injury to the
Labor Commission. Employees have 180 days to report a work-related injury and
illness.
Risk 2-6 Insurance/Bonds
- Risk is a part of all projects. Making plans to properly prepare is a critical function
of the overall managing role.
Safety Equipment 2-6 Insurance/Bonds
- Insisting safety equipment is available and properly used and all times establishes
an atmosphere conducive for safe work practices.
, Utah Contractor Business and Law Exam 2026
Timing of Liens 3-4 (Liens)
- Preliminary Notice filed within 20 days after work starts.
- Any Preliminary Notices after 20 days are only effective 5 days after they are files.
- After a Notice of Completion is filed, any Preliminary Notices must be filed within
10 days.
- After a Notice of Completion is filed, a notice of lien must be files within 90 days
afterwards, or 180 days after final completion of the contract occurs if there is no
notice of completion.
- Copies of the construction services lien need to be certified mailed to the property
owner within 30 days of filing the lien.
- After filing the lien, the claimant has 180 days to file a lawsuit.
OSHA Contents 4-1 to 4-4 (OSHA)
- OSHA Posters
- Utah Osha (UOSH)
- Sharp Program
- OSHA record keeping
- Employer Responsibilities
- Employee Responsibilities
UTAH OSHA (UOSH) 4-1 (OSHA)
- Utah's state adopted OSHA plan. The plan is to develop and enforce a standard
"at least as effective" as the federal standards.
Common Work Accidents The most common cause of accidents in the workplace are unsafe actions.
SHARP Program 4-2 (OSHA)
- Utah employers have the opportunity to participate in the Safety and Health
Achievement Recognition Program
- It is administered by UOSH.
OSHA/UOSH Recordkeeping and Reporting 4-2 (OSHA)
- Employers are required to report to UOSH by phone WITHIN 8 HOURS of any
fatalities, disabling, significant, and serious injuries or illnesses to workers.
- Recording criteria for injury: MEDICAL TREATMENT BEYOND FIRST AID.
Employers with MORE THAN 10 EMPLOYEES have specific OSHA recordkeeping
requirements
- Summary Page posted from Feb 1 to April 30 of the year following the year
covered on the form.
- Safety Data Sheets need to be accessible for all hazardous chemicals and
materials.
OSHA Inspections 4-3 (OSHA)
Employers are subject to the following inspections/investigations:
- Complaint Inspections
- Programmed Inspections
- Accident Inspections
- Fatality investigations
Underground Utility Safety 4-3 (OSHA)
- If excavating or digging, call the COMMON GROUND ALLIANCE (CGA) at 811.
Employer OSHA Responsibilities 4-3 (OSHA)
- Provide workplace free from hazards and compliance with OSH act.
- Examine conditions to make sure they conform with OSHA.
- Make sure employees have and use safe tools and equipment and properly
maintain this equipment.
- Provide safety training in a language employees understand.
- Develop a written plan and train employees if using hazardous chemicals
Setting Up A Business in Utah 1-1 (Business Structure)
- Register the business in Utah with the Department of Commerce Division of
Corporations and Commercial Code.
- To form an entity use the One Stop Business Registration Process
(www.corporations.utah.gov)
- An entity formed in Utah is considered domestic. An entity formed outside of Utah
must register as a foreign entity.
Sole Proprietorship 1-1, 1-2, 1-7 (Business Structure)
- Flexible because the structure is ONE PERSON with complete authority and full
liability.
- The individual operating the business in the model reports income with
SCHEDULE C AND FORM 1040.
Advantages: Simplicity and Easy Transfer of Ownership
- No formal action to start-up
- Sole Proprietors with no employees needs no EIN from the IRS
- Sale of business is at discretion of the owner
Disadvantages: Unlimited personal responsibility.
- Personally responsible for all debts and obligations.
- Personal assets can be used to satisfy debts.
Partnerships 1-2, 1-3, 1-7 (Business Structure)
- Agreement between two individuals and based around contributing some asset.
- Each Partner shares in the profits and loses of company.
Advantages: Limited Partnerships
- A limited partner's financial responsibility is limited to liabilities of the business.
Disadvantages: Joint & Individual Liability
- Partners retain full, shared liability among owners.
S Corporation 1-3, 1-4, 1-7 (Business Structure)
- Limited to 100 persons
- Only one class of stock
- File taxes under form 1120s
ADVANTAGES:
- Liability protection: S corps hold all business liability.
- Tax Benefits: only wages are subject to employment tax.
DISADVANTAGES:
- Increased regulation: S corps require routine meetings with minutes taken at the
meeting.
- Restriction of Ownership: restricted on size and membership
C Corporation 1-4, 1-5, and 1-7 (Business Structure)
- An independent legal entity owned by shareholders but the shareholders are not
liable for the actions and debts of the corporation.
- Corporations use form 1120 or 1120-A income tax return
Advantages:
- Liability Protection: corporations create a new legal entity.
- Stock: able to issue stocks, and ownership is transferred through sale of stocks.
- Tax Advantages: corporations file taxes separate from the owners
Disadvantages:
- Double Taxation: Corporate profits are taxed at corporate level and when
dividends are paid to shareholders.
Limited Liability Company 1-5 and 1-7 (Business Structure)
- Entitiy formed under state law by filing articles of organizations. An LLC may be
classified for tax purposes as a partnership, cooperation, or entity disregarded as an
entity separate from its owner by applying the rules.
- No tax paid at entity level. Profits and losses are passed through to the members.
General Liability 2-1 (Insurance/Bonds)
- General Liability Insurance is issued to protect against liability claim for bodily
injury and property damage arising out of premises, operations, products, and
completed operations.
- Liability insurance is designed to offer specific protection against THIRD PARTY
(NON EMPLOYEE) INSURANCE CLAIMS.
, Utah Contractor Business and Law Exam 2026
Umbrella Liability 2-2 (Insurance/Bonds)
- Coverage thats can provide additional limit over the underlying primary policy.
- It may have a broader definition of coverage and help fill gaps in coverage.
Property Insurance 2-2 (Insurance/Bonds)
- Commercial property insurance protects the property of the business, such as the
buildings and equipment. Often property insurance policies are written to cover
specific risks, such as FIRE insurance, FLOOD insurance, or EARTHQUAKE
insurance. These are called NAMED PERIL OR ALL-RISK POLICIES.
Certificate of Insurance 2-2 (Insurance/Bonds)
- The insurance company providing coverage wants a certificate of insurance
because it helps necessitate that the risk be shared WITH EACH PARTICIPATING
ENTITY.
- You need a certificate of insurance to get licensed.
- the coverage needs to be $100,000/incident and $300,00 in total.
- The DOPL is the certificate holder.
Contract Surety Bonds 2-3 (Insurance/Bonds)
- Government project bonds are governed by law. Federal government projects are
governed by the "Miller Act," which dictates that performance and payment bonds
are required for all federal construction projects over $100,000.
Types of Bonds 2-3 (Insurance/Bonds)
Bonds provide a guarantee to the project owner
- Bid Bond: Guarantees that the bidder will complete the work.
- Maintenance Bond: Protects owner against defects in materials and work.
- Payment Bond: Guarantees that the contractor will pay all subcontractors and
suppliers.
- Performance Bond: contractor will complete the project.
Independent Contractors - Licensure and Exemptions 2-3, 2-4 (Insurance/Bonds)
- Independent Contractor is an individual who controls what will be done and how it
will be accomplished.
- The IRS examines three categories when defining someone as an independent
contractor: BEHAVIORAL CONTROL, FINANCIAL CONTROL, AND TYPE OF
RELATIONSHIP.
- A business owner is required to provide a FORM 1099 for each independent
contractor who they paid $600 or more during the year.
Worker's Compensation Insurance Requirements 2-4, 2-5 (Insurance/Bonds)
- The fact that all employees must be covered puts some level of liability on general
contractors to have EVERY WORKER ON THEIR SITE INSURED.
- If the IRS defines a worker as an employee the insurance is paid by the contractor.
- If the worker is a sub-contractor then the premiums can be paid by the
subcontractor.
- The general contractor assumes responsibility to COLLECT CERTIFICATES OF
INSURANCE for each sub-contractor or the lability will shift to the general
contractor.
- An employer is required to report an injury on Form 122 Employer's First Report of
Injury and Illness, to the insurer within 7 days. the insurer reports the injury to the
Labor Commission. Employees have 180 days to report a work-related injury and
illness.
Risk 2-6 Insurance/Bonds
- Risk is a part of all projects. Making plans to properly prepare is a critical function
of the overall managing role.
Safety Equipment 2-6 Insurance/Bonds
- Insisting safety equipment is available and properly used and all times establishes
an atmosphere conducive for safe work practices.
, Utah Contractor Business and Law Exam 2026
Timing of Liens 3-4 (Liens)
- Preliminary Notice filed within 20 days after work starts.
- Any Preliminary Notices after 20 days are only effective 5 days after they are files.
- After a Notice of Completion is filed, any Preliminary Notices must be filed within
10 days.
- After a Notice of Completion is filed, a notice of lien must be files within 90 days
afterwards, or 180 days after final completion of the contract occurs if there is no
notice of completion.
- Copies of the construction services lien need to be certified mailed to the property
owner within 30 days of filing the lien.
- After filing the lien, the claimant has 180 days to file a lawsuit.
OSHA Contents 4-1 to 4-4 (OSHA)
- OSHA Posters
- Utah Osha (UOSH)
- Sharp Program
- OSHA record keeping
- Employer Responsibilities
- Employee Responsibilities
UTAH OSHA (UOSH) 4-1 (OSHA)
- Utah's state adopted OSHA plan. The plan is to develop and enforce a standard
"at least as effective" as the federal standards.
Common Work Accidents The most common cause of accidents in the workplace are unsafe actions.
SHARP Program 4-2 (OSHA)
- Utah employers have the opportunity to participate in the Safety and Health
Achievement Recognition Program
- It is administered by UOSH.
OSHA/UOSH Recordkeeping and Reporting 4-2 (OSHA)
- Employers are required to report to UOSH by phone WITHIN 8 HOURS of any
fatalities, disabling, significant, and serious injuries or illnesses to workers.
- Recording criteria for injury: MEDICAL TREATMENT BEYOND FIRST AID.
Employers with MORE THAN 10 EMPLOYEES have specific OSHA recordkeeping
requirements
- Summary Page posted from Feb 1 to April 30 of the year following the year
covered on the form.
- Safety Data Sheets need to be accessible for all hazardous chemicals and
materials.
OSHA Inspections 4-3 (OSHA)
Employers are subject to the following inspections/investigations:
- Complaint Inspections
- Programmed Inspections
- Accident Inspections
- Fatality investigations
Underground Utility Safety 4-3 (OSHA)
- If excavating or digging, call the COMMON GROUND ALLIANCE (CGA) at 811.
Employer OSHA Responsibilities 4-3 (OSHA)
- Provide workplace free from hazards and compliance with OSH act.
- Examine conditions to make sure they conform with OSHA.
- Make sure employees have and use safe tools and equipment and properly
maintain this equipment.
- Provide safety training in a language employees understand.
- Develop a written plan and train employees if using hazardous chemicals
