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If your contractor doesn't have a Letter of Good Standing, should you still hire him?

by , 05 September 2014
Every business must have a Letter of Good Standing. It's a legal requirement and helps to prove your company's legally complaint and actually exists.

So if you need to hire a contractor, let's say to fix your roof, the first thing you should do is ask for his business' Letter of Good Standing.

But what if, when you ask for it, he tells you his company doesn't have one. Should you still hire him?

Keep reading to find out the answer...

 

Here's the answer to if you should hire a contractor that doesn't have a Letter of Good Standing

 
The answer to this question is quite simply no! You shouldn't hire a contractor that doesn't have a Letter of Good Standing.
 
A Letter of Good Standing shows you that:
 
His company actually exists;
He paid all its statutory dues to COID; 
He met all its filing requirements; and
And he has the authorisation to transact business.
 
If your contractor doesn't have any of these things, the business may be operating illegally and that means you have no recourse if anything bad happens.
 
So what should you do if your contractor doesn't have a Letter of Good Standing?
 
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Here's what to do if your contractor doesn't have a Letter of Good Standing

 
- Tell him you won't use his services because he doesn't have a Letter of Good Standing.
 
- Report the contractor to the appropriate authorities because it's illegal for him to carry out business without one.
 
- Find a new contractor who does have a Letter of Good Standing.
 
Ensure you do this if your contractor doesn't have this letter because it'll cause huge problems for you if you don't.


PS: We strongly recommend you check out the COID Compliance Guide. It has everything you need to fully comply with the COID Act.
 

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