alize that they’ve missed a key step along the way. For example, in most states, secretary of state filings precede licensure through the state engineering board (www.harborcompliance.com/information/filing- authority/engineering-licensing-boards), but that’s not always the case. In others, key prerequisites must be met. Sometimes firms need to adjust their name or structure to fit the new state’s requirements. Failing to research all of the regulatory nuances in a new state can lead to rejected filings, wasting valuable time. This can all be avoided by researching secretary of state and engineering board requirements together before beginning any applications. No one in charge Another license habit that often backfires is leaving individual licens- ing to your engineers. While many firms find it best to let engineers handle the applications and renewals, it’s critical that you install some means of tracking and verifying the individual licenses of engineers in responsible charge, at the very least. Firms often forget that wherever firm licenses are required, they are linked to the underlying individual licenses. In some cases, you can have multiple engineers in responsible charge of the firm depending on their field of licensure. For example, you can have an engineer in responsible charge for me- chanical engineering, one for electrical engineering, and one for civil engineering. Thus, if you lose that engineer in responsible charge in a particular field of engineering, you cannot practice that field in the state. If a responsible engineer leaves the firm or suffers a license lapse, your firm must appoint a replacement and notify state authorities promptly or risk forfeiting your firm license. Even if the responsible engineer in charge changes his or her address, you must notify the state. Tracking continuing education requirements as well can help your individual engineers maintain continuous licensure. Walking away While it’s important to license your company for growth, it’s also important to manage licensing where you’re no longer active. If you finish a major project in a state and don’t see immediate opportunities there, it’s important to either properly close down your presence or maintain it. Sometimes companies are tempted to just walk away, but that is by far the most costly and problematic option. If you leave a state without meeting your tax obligations, closing your tax accounts, and terminating the corporate registration (www.harbor- compliance.com/information/certificate-of-cancellation-withdrawal), you’re left with states that are going to expect you to file annual reports and other records every year, and will be assessing penalties if you don’t. If you allow your licenses to lapse, they will also accrue fees. These penalties and fees will keep accruing until you properly with- draw from the state or reinstate them, at which point you’ll have to do all those back filings and pay all those back penalties. We had a client recently that had let their state registration and licenses lapse in Florida, thinking they would never go back. Then a big op- portunity came along, and they had to submit back-due filings for each year, reinstate their licenses, and pay substantial penalties to do so. The
process to regain good standing is time-consuming and expensive. In some cases, states may not even permit you to reinstate your entity. Low budget, low priority Maybe the worst license habit as far as the potential damage it can do to your firm is simply failing to make it a high enough priority. It’s very easy to lose sight of a $135 license in the midst of busy operations, particularly for firms operating in numerous states. Yet unlicensed practice is a misdemeanor in most states, carrying potential penalties of as much as $1,000 per violation per day in some jurisdictions. Since discipline must generally be reported to other states, which often impose reciprocal discipline, the fallout from a single license lapse can be substantial. Citations are usually published online and have tremendous staying power, damaging your reputation and competitive abilities. Stealth mode The final habit is not particularly destructive, but it’s one that presents great upside potential. When you work to ensure full licensure (www. harborcompliance.com/compliance-solutions-engineering-firms) and maintain it throughout your operations, you are a much more reliable partner and provider. Your business is built on a stronger foundation with fewer risks. Yet firms rarely use their compliance as a selling point in their market- ing efforts. Once you’ve invested in compliance, be sure to spread the word to partners, prospects, and clients. Talk about your commitment to employing licensed professionals and maintaining active licenses as a demonstration of your high professional standards, quality work, reliable performance, and ethical dealings. License to succeed Most of the habits in this article boil down to looking at engineer- ing licenses as an obstacle rather than a source of strength, stability, and sustainability. By being proactive and positive, firms can enhance profits and growth and enjoy the peace of mind that comes from total compliance. To learn more about licensing strategies for your firm, check out the following white papers: • Managing Licensing to Maximize Returns: How 3 Firms Achieved ROIs of Over 30X (www.harborcompliance.com/landing-pages/ managing-business-licensing-to-maximize-returns) • Engineering Licensing: The Definitive Guide (www.harborcompli- ance.com/landing-pages/engineering-licensing-the-definitive-guide) JERRI-LYNN WIER is an attorney and compliance specialist for Harbor Compli- ance (www.harborcompliance.com/compliance-solutions-engineering-firms), a provider of license and entity management solutions for businesses. She has 20 years of experience in insurance, business, and election compliance, and her team manages licensing for many top ENR firms. She is available to answer any questions about your licensing needs at 888-995-5895 or info@ harborcompliance.com. Detailed, specific state-level licensing information is available at www.harborcompliance.com/information/engineering-license. Disclaimer: Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.
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