Business FinancesQuestion 1175 of 1605
A contractor who performs work requiring a license without being properly licensed at all times during the project:
a.Automatically receives a city business license
b.May still collect full payment plus interest
c.Faces no financial consequence
d.May be barred from collecting compensation and may have to return money already paid
Explanation
Under B&P Code §7031, an unlicensed contractor (or one not licensed at all times during performance) is barred from suing to collect compensation and may be forced to disgorge (repay) all money received for the work. Proper licensing is a strict financial as well as legal necessity.
Law Reference: Business & Professions Code §7031Practice all 1605 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)