CSLB - LAW AND BUSINESS EXAM LATEST UPDATE 2026
GRADED A+
2 types of qualifying individuals for each type of license -ANSWER-Individual - Responsible
Managing Employee (RME) or Owner
Partnership - Qualifying Partner or RME
Corporation - Responsible managing officer (RMO) or RME
LLC - RME, RMO, Responsible Managing member/manager
What must be filed w/CSLB if RME/RMO leaves? Within how long? If not, what happens? -
ANSWER-"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) -ANSWER-Full time employee works at least 32
hours or 80% of operating time of biz, whichever is less.
May be used to qualify for individual, partnership, or corp license.
Never more than 3 licensees at one time.
Can only act as qualifier for 1 license at a time unless either: 1) other licensee is subsidiary 2)
he/she owns at least 20% of licensee 3) majority of officers/partners of other one also are
those of 1st
Responsible Managing Officer (RMO) -ANSWER-Officer of Corp
Journeyman -ANSWER-A person who has completed an apprecnticeship program or is an
experienced worker, not a trainee, and is fully qualified to perform the trade without
supervision.
Foreman/Supervisor -ANSWER-A person who has the knowledge/skill of a journeyman and
directly supervises physical construction
, What are penalties for contracting w/out a license -ANSWER-- Misdemeanor offense
- 1st offense may receive citation from registrar, potential sentence of up to 6 months in jail
and/or $500 fine, which is accompanied by civil penalty of no less than $200 and no more
than $15,000. May lessen or waive if contractor obtains license within prescribed period of
time.
- Felony charges for contracting w/out a license in emergency projects.
- 2nd offense found guilty of criminal offense which is punishable by civil penalty of 20%
contract price or $4,500, whichever is greater, and county jail min 90 days.
Penalty for advertising for work outside of your license -ANSWER-fine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license -ANSWER-Citation from registrar
and civil penalty up to $15,000
Penalty for deliberate fraudulent use of contractor's license -ANSWER-Up to $10,000 and/or
one year jail
Bond must be filed with _ within _ days of effective date of bond. -ANSWER-CSLB ; 90
Contractor's Bond amount -ANSWER-$15,000
Performance Bond -ANSWER-guarantees job will be completed according to building plans
and specs. If work is unacceptable or project is abandoned, bonding company can hire
another contractor to complete the work or settle for damages.
Payment Bond -ANSWER-Guarantee to the owner that no liens for materials or labor will be
filed against the property.
Contract Bond -ANSWER-Guarantees both job completion and payment of all labor and
materials.
GRADED A+
2 types of qualifying individuals for each type of license -ANSWER-Individual - Responsible
Managing Employee (RME) or Owner
Partnership - Qualifying Partner or RME
Corporation - Responsible managing officer (RMO) or RME
LLC - RME, RMO, Responsible Managing member/manager
What must be filed w/CSLB if RME/RMO leaves? Within how long? If not, what happens? -
ANSWER-"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) -ANSWER-Full time employee works at least 32
hours or 80% of operating time of biz, whichever is less.
May be used to qualify for individual, partnership, or corp license.
Never more than 3 licensees at one time.
Can only act as qualifier for 1 license at a time unless either: 1) other licensee is subsidiary 2)
he/she owns at least 20% of licensee 3) majority of officers/partners of other one also are
those of 1st
Responsible Managing Officer (RMO) -ANSWER-Officer of Corp
Journeyman -ANSWER-A person who has completed an apprecnticeship program or is an
experienced worker, not a trainee, and is fully qualified to perform the trade without
supervision.
Foreman/Supervisor -ANSWER-A person who has the knowledge/skill of a journeyman and
directly supervises physical construction
, What are penalties for contracting w/out a license -ANSWER-- Misdemeanor offense
- 1st offense may receive citation from registrar, potential sentence of up to 6 months in jail
and/or $500 fine, which is accompanied by civil penalty of no less than $200 and no more
than $15,000. May lessen or waive if contractor obtains license within prescribed period of
time.
- Felony charges for contracting w/out a license in emergency projects.
- 2nd offense found guilty of criminal offense which is punishable by civil penalty of 20%
contract price or $4,500, whichever is greater, and county jail min 90 days.
Penalty for advertising for work outside of your license -ANSWER-fine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license -ANSWER-Citation from registrar
and civil penalty up to $15,000
Penalty for deliberate fraudulent use of contractor's license -ANSWER-Up to $10,000 and/or
one year jail
Bond must be filed with _ within _ days of effective date of bond. -ANSWER-CSLB ; 90
Contractor's Bond amount -ANSWER-$15,000
Performance Bond -ANSWER-guarantees job will be completed according to building plans
and specs. If work is unacceptable or project is abandoned, bonding company can hire
another contractor to complete the work or settle for damages.
Payment Bond -ANSWER-Guarantee to the owner that no liens for materials or labor will be
filed against the property.
Contract Bond -ANSWER-Guarantees both job completion and payment of all labor and
materials.
