Louisiana Contractor's Exam – Business and
Law: Best Practice Questions & Study Guide
(2026) | Instant Download Pdf
This comprehensive guide provides 100 essential open-ended questions and answers for
the Louisiana Contractor's Business and Law Exam. The official reference for this exam is
the Contractors Guide to Business, Law and Project Management, Louisiana Contractors
12th Edition, published by NASCLA.
Exam Overview
The Business and Law examination is an online, open-book test. All companies applying for
a Commercial Contractor's License, Residential Building Contractor's License, or Mold
Remediator's License must have at least one qualifying party pass this examination.
Exam Detail Information
Time Allowed 4 hours (240 minutes)
Passing Score 70%
Open Book Yes
Official Contractors Guide to Business, Law and Project Management,
Reference Louisiana Contractors 12th Edition
SECTION 1: CONTRACTOR'S LICENSING LAW (Questions 1-25)
Q1: What is bid shopping, and why is it considered an unethical practice?
Answer: Bid shopping occurs when bids are revealed to create more competition among
subcontractors. It is considered unethical because it penalizes subcontractors who invested
time and effort in preparing accurate bids and undermines the integrity of the competitive
bidding process.
Q2: What benefit does an S corporation provide to its owners?
, Answer: An S corporation provides the benefit of preventing double taxation. Income
passes through to shareholders who report it on their personal tax returns, avoiding the
corporate-level taxation that C corporations face.
Q3: What is the licensing threshold for residential construction projects in
Louisiana?
Answer: A contractor's license is required when the residential project is valued over
$50,000. For commercial projects, the threshold is also $50,000. For electrical, mechanical,
and plumbing work, the threshold is $10,000.
Q4: How many members serve on the Louisiana State Licensing Board for
Contractors?
Answer: The Louisiana State Licensing Board for Contractors is composed of 15
members.
Q5: What is the mandatory waiting period for out-of-state applicants from the time the
Board receives the application to the time the license is issued?
Answer: Out-of-state applicants have a mandatory waiting period of 45 days.
Q6: What is the minimum net worth requirement for a contractor applying for a
license in Louisiana?
Answer: Contractors must demonstrate a minimum net worth of $10,000 through a current
financial statement.
Q7: Which type of license requires a four-hour course in "Unfair Trade Practices and
Consumer Protection Law"?
Answer: The Mold Remediation License requires a four-hour course in "Unfair Trade
Practices and Consumer Protection Law".
Q8: What is the threshold for requiring a written contract for home improvement
projects in Louisiana?
Answer: Louisiana law requires a written contract for home improvement projects
exceeding $7,500. An oral contract is unenforceable, and the contractor cannot collect
payment from the homeowner.
Q9: What is the purpose of the Louisiana Contractors Licensing Law (La. R.S.
37:2150-2193)?
Law: Best Practice Questions & Study Guide
(2026) | Instant Download Pdf
This comprehensive guide provides 100 essential open-ended questions and answers for
the Louisiana Contractor's Business and Law Exam. The official reference for this exam is
the Contractors Guide to Business, Law and Project Management, Louisiana Contractors
12th Edition, published by NASCLA.
Exam Overview
The Business and Law examination is an online, open-book test. All companies applying for
a Commercial Contractor's License, Residential Building Contractor's License, or Mold
Remediator's License must have at least one qualifying party pass this examination.
Exam Detail Information
Time Allowed 4 hours (240 minutes)
Passing Score 70%
Open Book Yes
Official Contractors Guide to Business, Law and Project Management,
Reference Louisiana Contractors 12th Edition
SECTION 1: CONTRACTOR'S LICENSING LAW (Questions 1-25)
Q1: What is bid shopping, and why is it considered an unethical practice?
Answer: Bid shopping occurs when bids are revealed to create more competition among
subcontractors. It is considered unethical because it penalizes subcontractors who invested
time and effort in preparing accurate bids and undermines the integrity of the competitive
bidding process.
Q2: What benefit does an S corporation provide to its owners?
, Answer: An S corporation provides the benefit of preventing double taxation. Income
passes through to shareholders who report it on their personal tax returns, avoiding the
corporate-level taxation that C corporations face.
Q3: What is the licensing threshold for residential construction projects in
Louisiana?
Answer: A contractor's license is required when the residential project is valued over
$50,000. For commercial projects, the threshold is also $50,000. For electrical, mechanical,
and plumbing work, the threshold is $10,000.
Q4: How many members serve on the Louisiana State Licensing Board for
Contractors?
Answer: The Louisiana State Licensing Board for Contractors is composed of 15
members.
Q5: What is the mandatory waiting period for out-of-state applicants from the time the
Board receives the application to the time the license is issued?
Answer: Out-of-state applicants have a mandatory waiting period of 45 days.
Q6: What is the minimum net worth requirement for a contractor applying for a
license in Louisiana?
Answer: Contractors must demonstrate a minimum net worth of $10,000 through a current
financial statement.
Q7: Which type of license requires a four-hour course in "Unfair Trade Practices and
Consumer Protection Law"?
Answer: The Mold Remediation License requires a four-hour course in "Unfair Trade
Practices and Consumer Protection Law".
Q8: What is the threshold for requiring a written contract for home improvement
projects in Louisiana?
Answer: Louisiana law requires a written contract for home improvement projects
exceeding $7,500. An oral contract is unenforceable, and the contractor cannot collect
payment from the homeowner.
Q9: What is the purpose of the Louisiana Contractors Licensing Law (La. R.S.
37:2150-2193)?
