2024 CSLB - LAW AND BUSINESS EXAM WITH 100% CORRECT ANSWERS

2 types of qualifying individuals for each type of license - Correct 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? - Correct answer-"Notice of disassociation" and "application for replacing qualifying individual". Within 20 days Or license automatically suspended Responsible Managing Employee (RME) - Correct 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) - Correct answer-Officer of Corp Journeyman - Correct 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 - Correct 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 - Correct 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 - Correct answer-fine of $700- $1000 Penalty for hiring unlicensed sub or allowing use of license - Correct answer-Citation from registrar and civil penalty up to $15,000 Penalty for deliberate fraudulent use of contractor's license - Correct answer-Up to $10,000 and/or one year jail Bond must be filed with _ within _ days of effective date of bond. - Correct answer- CSLB ; 90 Contractor's Bond amount - Correct answer-$15,000 Performance Bond - Correct 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 - Correct answer-Guarantee to the owner that no liens for materials or labor will be filed against the property. Contract Bond - Correct answer-Guarantees both job completion and payment of all labor and materials. Bid Shopping - Correct answer-When prime contractor discloses sub's bid to other subs to get them to lower their price. Bid Peddling - Correct answer-When a sub whose bid wasn't chosen lowers bid in attempt to induce contractor to pick them instead. The Listing Law - Correct answer-Applies to state and local public works projects. Requires contractor to include in their bid name, place of business, and license # of each sub whose bid is .5% or more of total bid or $10,000 or more, whichever is greater, and the portion of work performed by each sub. If contractor violates, public entity may cancel contract or assess penalty of not more than 10% of amount of subcontract involved. May also be subjected to discipline by CSLB. If material change is made by public entity to its invitation to bid w/in 72 hours of bid closing, what has to happen? - Correct answer-Must extend deadline by no less than 72 hours. Reasons public entity can give consent for contractor to substitute a sub. - Correct answer-Failure to execute contract Insolvency