CSLB Law and Business Exam Questions and Verified Answers Graded A+ 2026/27
-2 types of qualifying individuals for each type of license - 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? -
"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) - 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) - Officer of Corp
Journeyman - 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 - A person who has the knowledge/skill of a journeyman and directly
supervises physical construction
What are penalties for contracting w/out a license - - 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 - fine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license - Citation from registrar and
civil penalty up to $15,000
Penalty for deliberate fraudulent use of contractor's license - Up to $10,000 and/or one
year jail
Bond must be filed with _ within _ days of effective date of bond. - CSLB ; 90
Contractor's Bond amount - $15,000
-2 types of qualifying individuals for each type of license - 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? -
"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) - 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) - Officer of Corp
Journeyman - 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 - A person who has the knowledge/skill of a journeyman and directly
supervises physical construction
What are penalties for contracting w/out a license - - 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 - fine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license - Citation from registrar and
civil penalty up to $15,000
Penalty for deliberate fraudulent use of contractor's license - Up to $10,000 and/or one
year jail
Bond must be filed with _ within _ days of effective date of bond. - CSLB ; 90
Contractor's Bond amount - $15,000
