Business Organization, Licensing, and Contracting
Structure and authority to operate
Know the business entity types - sole proprietorship, partnership, LLC, corporation - and their liability and tax implications. An LLC limits personal liability but does not shield against personal negligence or unlicensed activity. Know that in most states a contractor's license is required to bid or perform roofing work above a threshold, and that unlicensed contracting can void contracts and bar recovery.
Know the licensing mechanics: qualifying party or qualifier requirements, exam, bond, insurance (general liability and workers' comp), and renewal. Know that subcontractors must also be licensed, and that hiring an unlicensed sub can expose the prime to liability. Know the contract elements: parties, scope, price, schedule, payment terms, warranty, insurance, dispute resolution, and signatures.
Traps: assuming an LLC eliminates all liability; assuming a license transfers with a business sale (it usually doesn't); forgetting that workers' comp may be required even for small crews; and mixing up lien rights with contract rights.
Worked example: a homeowner signs with an unlicensed roofer; the roofer performs work but the homeowner refuses to pay. In many states the unlicensed contractor cannot sue to collect - an expensive lesson in licensing.
Rule of thumb: verify license, insurance, and bond before signing or starting work - for yourself and for every sub.