Nevada § 624.263 - Financial responsibility of applicant or licensee: Standards and criteria for determination

§ 624.263. Financial responsibility of applicant or licensee: Standards and criteria for determination

1. The financial responsibility of a licensee or an applicant for a contractor's license

must be established independently of and without reliance on any assets or guarantees

of any owners or managing officers of the licensee or applicant or any person who

qualifies on behalf of the licensee or applicant pursuant to subsection 2 of NRS 624.260 , but the financial responsibility of the following persons may be inquired into and

considered as a criterion in determining the financial responsibility of the licensee

or applicant: (a) Any owner of the licensee or applicant; (b) Any managing officer of the licensee or applicant; or (c) Any person who qualifies on behalf of the licensee or applicant pursuant to subsection

2 of NRS 624.260 . 2. The financial responsibility of an applicant for a contractor's license or of a

licensed contractor may be determined by using the following standards and criteria

in connection with each applicant or contractor and each associate or partner thereof: (a) Amount of net worth. (b) Amount of liquid assets. (c) Amount of current assets. (d) Amount of current liabilities. (e) Amount of working capital. (f) Ratio of current assets to current liabilities. (g) Fulfillment of bonding requirements pursuant to NRS 624.270 . (h) Prior payment and credit records. (i) Previous business experience. (j) Prior and pending lawsuits. (k) Prior and pending liens. (l) Adverse judgments. (m) Conviction of a felony or crime involving moral turpitude. (n) Prior suspension or revocation of a contractor's license in Nevada or elsewhere. (o) An adjudication of bankruptcy or any other proceeding under the federal bankruptcy

laws, including: (1) A composition, arrangement or reorganization proceeding; (2) The appointment of a receiver of the property of the applicant or contractor or

any officer, director, associate or partner thereof under the laws of this State or

the United States; or (3) The making of an assignment for the benefit of creditors. (p) Form of business organization, corporate or otherwise. (q) Information obtained from confidential financial references and credit reports. (r) Reputation for honesty and integrity of the applicant or contractor or any officer,

director, associate or partner thereof. 3. A licensed contractor shall, as soon as it is reasonably practicable, notify the

Board in writing upon the filing of a petition or application relating to the contractor

that initiates any proceeding, appointment or assignment set forth in paragraph (o)

of subsection 2. The written notice must be accompanied by: (a) A copy of the petition or application filed with the court; and (b) A copy of any order of the court which is relevant to the financial responsibility

of the contractor, including any order appointing a trustee, receiver or assignee. 4. Before issuing a license to an applicant who will engage in residential construction

or renewing the license of a contractor who engages in residential construction, the

Board may require the applicant or licensee to establish financial responsibility

by submitting to the Board: (a) A financial statement that is: (1) Prepared by a certified public accountant; or (2) Submitted on a form or in a format prescribed by the Board together with an affidavit

which verifies the accuracy of the financial statement; and (b) A statement setting forth the number of building permits issued to and construction

projects completed by the licensee during the immediately preceding year and any other

information required by the Board. The statement submitted pursuant to this paragraph must be provided on a form approved

by the Board. 5. In addition to the requirements set forth in subsection 4, the Board may require

a licensee to establish financial responsibility at any time. 6. An applicant for an initial contractor's license or a licensee applying for the

renewal of a contractor's license has the burden of demonstrating financial responsibility

to the Board, if the Board requests the applicant or licensee to do so.