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Business & Licensing

211 questions
201. An RME may qualify only one active license at a time unless what condition is met regarding ownership?
a.The qualifier owns at least 10 percent of each firm's equity
b.There is common ownership of at least 20 percent of each firm✓
c.The qualifier owns a majority of the voting stock of one firm
d.The firms share a common qualifier and the same classification

B&P §7068.1(a) permits one person to qualify more than one active licensee only where there is common ownership of at least 20 percent of the equity of each firm, or the firms stand in a parent, subsidiary, or joint-venture relationship; §7068.1(b) then caps the total at three firms in any one-year period. (a) is the 10 percent figure from §7071.9, which decides whether a qualifier's bond is required, not how many firms may be qualified. (c) sets a majority test the statute does not use. (d) restates the problem — a shared qualifier and a shared class are what the rule restricts, not what excuses it.

B&P Code §7068.1(a)
202. When qualifying a corporation, the RMO must be listed as an officer. Which role would NOT by itself establish someone as a bona fide corporate officer for RMO purposes?
a.A field superintendent who runs the corporation's jobsites daily✓
b.The president named in the corporation's statement of information
c.The secretary named in the corporation's statement of information
d.The treasurer named in the corporation's statement of information

B&P §7065 requires a corporation's RMO to be a bona fide officer — president, vice president, secretary, or treasurer — so the three officers listed here all qualify, and only the field superintendent does not. That person may still qualify the corporation, but as an RME under §7068, which carries the 32-hour bona fide employment test rather than an officer title. The trap is assuming that running the work is what makes an RMO; for the RMO route it is the office held, and for the RME route it is the employment relationship.

B&P Code §7065 / §7068
203. A newly formed corporation seeks a license. Which personnel information must be reported to the CSLB?
a.The qualifying individual only, since the license follows the qualifier
b.The officers and directors only, with the qualifier reported separately later
c.Every person the corporation employs on its construction projects
d.The officers, directors, and qualifying individual, as personnel of record✓

B&P §7065 requires a corporate applicant to report its officers, directors, and qualifying individual; these become the personnel of record, and §7083 requires changes among them to be reported to the Registrar. (a) is the misconception that the qualifier is the license — the qualifier is one of several reportable persons. (b) splits a single disclosure into two steps the statute does not contemplate. (c) over-reads the duty: ordinary employees are not personnel of record, which is why a new hire on a crew triggers no CSLB filing.

B&P Code §7065 / §7083
204. When the Registrar reissues an existing license number to a successor business, what does §7075.1 require?
a.That the successor apply in a different license classification
b.That the successor be formed outside California as a foreign entity
c.That the number have sat unused for at least five years first
d.Continuity of ownership or personnel with the old entity✓

B&P §7075.1(b) allows reissuance where the entity is unchanged, and §7075.1(c) allows reissuance to a different entity only in listed situations, each of which is a continuity case: a parent and subsidiary merger or creation, a change between domestic and foreign filing status where the new entity continues the business, family succession on a licensee's death or absence, a corporation or LLC formed by an individual licensee who keeps more than 50 percent of the voting power, and an LLC formed by a corporation with the same listed personnel. (a) has it backwards, since a new classification needs its own qualification. (b) picks one fact pattern out of §7075.1(c)(1) and makes it a requirement. (c) imports the §7141 five-year renewal window, which is about reviving a license rather than moving a number.

B&P Code §7075.1(b)-(c)
205. A partnership contractor adds a new partner. What is the effect on the license?
a.No effect, because the partnership keeps the same business name
b.The new partner is simply added as a personnel-of-record change
c.The entity has changed, so notice and new licensure follow✓
d.The license is suspended until the new partner passes the examination

A license is issued to a particular partnership under B&P §7076, so adding or removing a partner creates a different legal entity: the CSLB must be notified, a new license is often required, and §7075.1 governs whether the old number may be reissued. (a) confuses the trade name with the licensee. (b) is the closest trap, because officers of a corporation genuinely are handled as personnel-of-record changes under §7083 — partners are not, because the partnership itself is the licensee. (d) invents an examination trigger; a new partner need not be a qualifier.

B&P Code §7076 / §7075.1
206. Which of these most clearly REQUIRES a contractor's license?
a.A $200 fence repair that stands complete in itself
b.A homeowner painting a bedroom in their own house
c.A neighbor stacking firewood for free next door
d.A $6,000 kitchen remodel for a paying client✓

B&P §7048(a) exempts a project only where the aggregate price for labor, materials, and all other items is under $1,000, the work is casual, minor, or inconsequential, and no building permit is required, so a $6,000 remodel for a client needs a license. (a) sits under the dollar threshold and is complete in itself — though §7048(b) would withdraw the exemption if it were one slice of a larger job. (b) is the owner working on their own property, which is not contracting for another. (c) is neither construction work nor work done for compensation. Note also §7048(c): the exemption is lost by anyone who advertises as a contractor, or who employs another person to do the work.

B&P Code §7048(a)-(b)
207. A licensed contractor's license lapses due to suspension during part of a project. Under section 7031, what risk does the contractor face regarding pay for work done while unlicensed?
a.None, because the contractor was licensed when the contract was signed
b.A civil penalty only, with the contract price still fully collectible
c.Being barred from recovering compensation for the unlicensed period✓
d.Losing only the profit margin, while costs remain recoverable

B&P §7031 requires a contractor to be duly licensed at all times during performance, and bars an action to collect compensation for work performed while unlicensed — the owner may also sue to recover everything already paid. (a) is the misconception §7031 was amended to close: licensure at signing is not enough. (b) treats the consequence as monetary discipline rather than a bar on the contract action. (d) invents a cost-versus-profit split; the bar reaches all compensation, not the margin alone.

B&P Code §7031
208. Summarizing the bonding scheme: an active licensee must carry the $25,000 license bond, and may additionally need which bonds depending on circumstances?
a.A $100,000 LLC employee bond, required of every active licensee
b.A $25,000 qualifier bond, plus a disciplinary bond after discipline✓
c.A $12,500 qualifier bond, the figure in use before 2023
d.A $15,000 disciplinary bond that replaces the standard license bond

Under B&P Code sections 7071.6, 7071.9 and 7071.8 the baseline is the $25,000 license bond. On top of it, a $25,000 bond of qualifying individual applies when the RMO or RME owns less than 10% of the entity, and a disciplinary bond of at least $25,000 may be imposed after disciplinary action (b). (a) takes a real figure out of scope: the $100,000 bond under section 7071.6.5 is required only of limited liability company licensees, for employee wage and benefit claims. (c) is the pre-2023 qualifier amount, raised to $25,000 by SB 607 on January 1, 2023. (d) carries the pre-2023 disciplinary figure and adds a second error — the disciplinary bond is filed in addition to the license bond, never in place of it.

B&P Code §7071.6
209. A licensed contractor moved its office on March 2 and mailed the Registrar the required written notice on August 20, well past the statutory window. What follows under Bus. & Prof. Code §7083?
a.The change is treated as effective on March 2, the date the business actually moved out
b.Nothing follows from the delay, because the change takes effect when the licensee mails it
c.The change takes effect the day headquarters receives the notice, and the delay is grounds for discipline✓
d.The license is suspended automatically until the Registrar approves the new business address

Section 7083 gives the licensee 90 days from the change to notify the Registrar in writing on the board's form, and it attaches two consequences to a late notice. The change takes effect only on the date the written notification is received at the board's headquarters office, so the record is wrong for the whole intervening period. Separately, failing to notify within the 90 days is itself grounds for disciplinary action. A long window is not a soft one.

Bus. & Prof. Code §7083(a)-(c)
210. A licensed sole proprietor forms a corporation and keeps 100 percent of the voting shares. She wants the corporation to hold the license and would like to keep the number her customers already know. What does the law allow?
a.Nothing beyond filing articles with the Secretary of State, which moves the license to the corporation
b.A written assignment of the individual license to the corporation, signed by the Registrar
c.A new application, and necessarily a new number, because a number is never reissued to a corporation
d.A new application by the corporation, with its own $25,000 bond and qualifier; the number may be reissued✓

No license is transferable to another person or entity under any circumstances, and a corporation is a different legal person from the individual who formed it, so the corporation applies in its own name with its own $25,000 contractor bond, its own qualifying individual and its own workers' compensation position. The NUMBER is a separate question from the license: §7075.1(c)(5) lets the Registrar reissue it, on application, to a corporation formed by an individual licensee who keeps more than 50 percent of the voting power. Filing with the Secretary of State is a different agency's record and moves nothing at CSLB.

Bus. & Prof. Code §7075.1(a), (c)(5); §7071.6(a)

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211. A corporation applying in 2026 wants to name an RME as its qualifier. He worked as a journeyman electrician from 2013 to 2016, and as an electrical foreman from 2020 to 2025. He will work 30 hours a week for the corporation, which is open 40 hours a week. Where does the application stand?
a.Both tests are met, since eight years of trade experience and a 30-hour week are ample
b.The experience is sufficient, but 30 hours a week is short of the actively engaged test✓
c.Neither test is met, because only experience gained inside the last five years may be counted
d.The experience is short, but 30 hours a week does satisfy the actively engaged test

Run the two conditions separately. Experience: four full years at journey level, as a foreman, supervisor or contractor in the classification, within the ten years immediately before the application. The 2020 to 2025 foreman years are five years inside that window, so the experience test passes on its own. Actively engaged: for an RME the statute means 32 hours a week, or 80 percent of the hours the business operates, whichever is less. Eighty percent of 40 is 32, so the threshold is 32 hours and a 30-hour week falls short.

Bus. & Prof. Code §7068(c)(2)(B); CSLB, Before Applying for a License
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