CSLB - Law and Business Exam
2 types of qualifying individuals for each type of license - ANSIndividual - 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? -
ANS"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) - ANSFull 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) - ANSOfficer of Corp
Journeyman - ANSA 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 - ANSA person who has the knowledge/skill of a journeyman and
directly supervises physical construction
What are penalties for contracting w/out a license - ANS- 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 - ANSfine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license - ANSCitation from registrar and
civil penalty up to $15,000
, Penalty for deliberate fraudulent use of contractor's license - ANSUp to $10,000 and/or one
year jail
Bond must be filed with _ within _ days of effective date of bond. - ANSCSLB ; 90
Contractor's Bond amount - ANS$15,000
Performance Bond - ANSguarantees 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 - ANSGuarantee to the owner that no liens for materials or labor will be filed
against the property.
Contract Bond - ANSGuarantees both job completion and payment of all labor and materials.
Bid Shopping - ANSWhen prime contractor discloses sub's bid to other subs to get them to
lower their price.
Bid Peddling - ANSWhen a sub whose bid wasn't chosen lowers bid in attempt to induce
contractor to pick them instead.
The Listing Law - ANSApplies 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? - ANSMust extend deadline by no less than 72 hours.
Reasons public entity can give consent for contractor to substitute a sub. - ANSFailure to
execute contract
Insolvency
Failure to perform subcontract
Failure to furnish bonds
Clerical error
Unlicensed
Failure to perform work
Failure to pay prevailing wages
Not qualified
Public emergency or necessity (only after written finding)
If contractor requests substitution of sub on public job, public entity is required to___? -
ANSGive written notice to sub of request and reason for it by certified mail. Sub has 5
2 types of qualifying individuals for each type of license - ANSIndividual - 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? -
ANS"Notice of disassociation" and "application for replacing qualifying individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) - ANSFull 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) - ANSOfficer of Corp
Journeyman - ANSA 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 - ANSA person who has the knowledge/skill of a journeyman and
directly supervises physical construction
What are penalties for contracting w/out a license - ANS- 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 - ANSfine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license - ANSCitation from registrar and
civil penalty up to $15,000
, Penalty for deliberate fraudulent use of contractor's license - ANSUp to $10,000 and/or one
year jail
Bond must be filed with _ within _ days of effective date of bond. - ANSCSLB ; 90
Contractor's Bond amount - ANS$15,000
Performance Bond - ANSguarantees 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 - ANSGuarantee to the owner that no liens for materials or labor will be filed
against the property.
Contract Bond - ANSGuarantees both job completion and payment of all labor and materials.
Bid Shopping - ANSWhen prime contractor discloses sub's bid to other subs to get them to
lower their price.
Bid Peddling - ANSWhen a sub whose bid wasn't chosen lowers bid in attempt to induce
contractor to pick them instead.
The Listing Law - ANSApplies 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? - ANSMust extend deadline by no less than 72 hours.
Reasons public entity can give consent for contractor to substitute a sub. - ANSFailure to
execute contract
Insolvency
Failure to perform subcontract
Failure to furnish bonds
Clerical error
Unlicensed
Failure to perform work
Failure to pay prevailing wages
Not qualified
Public emergency or necessity (only after written finding)
If contractor requests substitution of sub on public job, public entity is required to___? -
ANSGive written notice to sub of request and reason for it by certified mail. Sub has 5
