Business FinancesQuestion 664 of 690
Effective January 1, 2023, the California Contractor License Bond was increased to:
a.$12,500
b.$15,000
c.$25,000 (up from $15,000) under SB 607, with proportional increases to the Bond of Qualifying Individual and the LLC Employee/Worker Bond
d.$50,000 for all general building contractors only
Explanation
Under Bus. & Prof. Code §7071.6, as amended by SB 607 (Roth, 2021), the contractor license bond amount increased from $15,000 to $25,000 effective January 1, 2023. The Bond of Qualifying Individual under §7071.9 was correspondingly raised to $25,000, and the LLC Employee/Worker Bond under §7071.6.5 was raised to $100,000. There is no class-specific $50,000 figure. The $12,500 and $15,000 amounts are the pre-2023 levels. The exam tests the CURRENT $25,000 figure, and a contractor cannot maintain active license status without the higher bond on file with CSLB.
Law Reference: Bus. & Prof. Code §7071.6Practice all 690 questions free — no signup required.
Related questions on this topic
- Under Bus. & Prof. Code §7071.11, when claims against a contractor's $25,000 license bond exceed the bond's penal sum, the bond proceeds are distributed in which order of priority?
- Instead of filing a contractor's license bond, a licensee may deposit cash or equivalent securities with the State Treasurer under Bus. & Prof. Code §7071.12. To replace the $25,000 license bond entirely with cash, the licensee must deposit:
- A Responsible Managing Employee (RME) differs from a Responsible Managing Officer (RMO) in that an RME must:
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- On a private construction project, the owner is generally entitled to withhold from each progress payment a 'retention' (retainage) of up to:
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