Louisiana Contractor's Exam – Business and Law
2026 | 100+ Practice Questions with Verified
Answers – LSLBC License Prep | Instant
Download Pdf
Introduction
This comprehensive study guide covers the Louisiana State Licensing Board for
Contractors (LSLBC) Business and Law Examination, required for Commercial
Contractor, Residential Building Contractor, and Mold Remediator licenses . The exam
contains multiple-choice questions on topics including Project Management, Contract
Management, Louisiana License Law, Financial Management, Safety, Labor Laws, Risk
Management, Tax Laws, Lien Laws, and Business Management . It is open-book, with no
time limit, and is based on the official reference text: Contractors Guide to Business, Law
and Project Management, Louisiana Contractors (12th Edition) published by NASCLA .
All answers are presented in bold italics with detailed rationales based on the 2026 LSLBC
regulatory updates and official study materials.
Domain 1: Louisiana License Law & LSLBC Regulations (Questions 1–25)
Q1. Which state agency is responsible for licensing contractors in Louisiana?
A) Louisiana Department of Revenue
B) Louisiana Secretary of State
C) Louisiana State Licensing Board for Contractors (LSLBC)
D) Louisiana Workforce Commission
Answer: C – LSLBC
Explanation: The Louisiana State Licensing Board for Contractors (LSLBC) is the central
regulatory body for Louisiana contractors. Recent legislation continues to consolidate
licensing authority under the LSLBC, including the transfer of plumbing licensing to the
Board .
,Q2. Under Louisiana law, a commercial contractor's license is required when a
project cost exceeds which threshold?
A) $7,500
B) $10,000
C) $50,000
D) $100,000
Answer: C – $50,000
Explanation: A commercial contractor's license is required when the project cost exceeds
$50,000. This threshold applies to most major classifications including Building
Construction, Electrical, Mechanical, and Heavy Construction .
Q3. Under new 2026 regulations, what is the minimum general liability insurance
requirement for residential contractors?
A) $100,000
B) $250,000
C) $500,000
D) $1,000,000
Answer: C – $500,000
Explanation: Act 757 (SB 326), effective June 2, 2026, increased the minimum general
liability insurance for residential, mold remediation, and home improvement contractors from
$100,000 to $500,000. Contractors must also provide proof of coverage for a minimum of
six months covering all licensed scopes of work .
Q4. What is the minimum net worth requirement for a commercial contractor license
applicant in Louisiana?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: B – $10,000
Explanation: Applicants must provide a current financial statement showing a minimum net
worth of $10,000. The financial statement must be current within 12 months of the
application date .
,Q5. Which of the following entities is NOT eligible to be designated as a Qualifying
Party for a contractor license?
A) A sole proprietor or spouse of a sole proprietor
B) Any current full-time employee of the applicant
C) Any stockholder, officer, or incorporator of a corporation
D) An independent contractor not employed by the company
Answer: D – An independent contractor not employed by the company
Explanation: According to LSLBC regulations, a Qualifying Party can be a sole proprietor
or spouse, a current full-time employee, a stockholder/officer/incorporator of a corporation, a
partner of a partnership, or a member/manager of an LLC. An independent contractor is not
eligible .
Q6. Under Louisiana law, what is the definition of "residential structure" for licensing
purposes?
A) Any building with more than four stories
B) A building or structure used primarily for occupancy by a person as a residence
C) Any commercial building with residential units
D) Any structure with a roof
Answer: B – A building or structure used primarily for occupancy by a person as a
residence
Explanation: A residential structure includes single-family dwellings and duplexes not more
than three floors in height, and structures part of or adjacent to the building. Structures more
than three floors in height require a Building Construction license .
Q7. What is the threshold for requiring a license for residential roofing work under
Act 422 (effective January 1, 2026)?
A) $1,000
B) $5,000
C) $7,500
D) $10,000
Answer: C – $7,500
Explanation: Act 422, effective January 1, 2026, requires contractors performing residential
roofing work valued at $7,500 or more to hold a residential roofing or residential
construction license .
, Q8. Which of the following is a NEW disciplinary violation created by Act 757 (2026)?
A) Failure to renew license on time
B) Failure to pay for materials or services when funds have been received from a client for
that purpose
C) Failure to display license number on advertising
D) Failure to maintain a physical office
Answer: B – Failure to pay for materials or services when funds have been received
from a client
Explanation: Act 757 created several new grounds for disciplinary action, including failure
to pay for materials or services when funds have been received from a client for that
purpose. Also included are material misrepresentations in permit applications and damaging
property to induce a property owner to execute a contract .
Q9. What is the maximum fine the LSLBC can impose under Act 757?
A) $5,000 flat fee
B) Up to 10% of total contract value, or up to $10,000 where contract value cannot be
determined
C) $50,000 flat fee
D) Up to 25% of total contract value
Answer: B – Up to 10% of total contract value, or up to $10,000 where contract value
cannot be determined
Explanation: Act 757 allows fines to reach up to 10% of total contract value. Where
contract value cannot be determined, fines may reach up to $10,000. The Board may also
recover administrative costs and attorney fees .
Q10. Under the 2026 regulations, contractors are expressly PROHIBITED from which
of the following activities?
A) Advertising services on social media
B) Interpreting insurance policies for clients
C) Using subcontractors on projects
D) Offering warranties on work performed
Answer: B – Interpreting insurance policies for clients
Explanation: Act 757 expressly prohibits contractors from: interpreting insurance policies
for clients, adjusting insurance claims, providing work agreements without good-faith cost
2026 | 100+ Practice Questions with Verified
Answers – LSLBC License Prep | Instant
Download Pdf
Introduction
This comprehensive study guide covers the Louisiana State Licensing Board for
Contractors (LSLBC) Business and Law Examination, required for Commercial
Contractor, Residential Building Contractor, and Mold Remediator licenses . The exam
contains multiple-choice questions on topics including Project Management, Contract
Management, Louisiana License Law, Financial Management, Safety, Labor Laws, Risk
Management, Tax Laws, Lien Laws, and Business Management . It is open-book, with no
time limit, and is based on the official reference text: Contractors Guide to Business, Law
and Project Management, Louisiana Contractors (12th Edition) published by NASCLA .
All answers are presented in bold italics with detailed rationales based on the 2026 LSLBC
regulatory updates and official study materials.
Domain 1: Louisiana License Law & LSLBC Regulations (Questions 1–25)
Q1. Which state agency is responsible for licensing contractors in Louisiana?
A) Louisiana Department of Revenue
B) Louisiana Secretary of State
C) Louisiana State Licensing Board for Contractors (LSLBC)
D) Louisiana Workforce Commission
Answer: C – LSLBC
Explanation: The Louisiana State Licensing Board for Contractors (LSLBC) is the central
regulatory body for Louisiana contractors. Recent legislation continues to consolidate
licensing authority under the LSLBC, including the transfer of plumbing licensing to the
Board .
,Q2. Under Louisiana law, a commercial contractor's license is required when a
project cost exceeds which threshold?
A) $7,500
B) $10,000
C) $50,000
D) $100,000
Answer: C – $50,000
Explanation: A commercial contractor's license is required when the project cost exceeds
$50,000. This threshold applies to most major classifications including Building
Construction, Electrical, Mechanical, and Heavy Construction .
Q3. Under new 2026 regulations, what is the minimum general liability insurance
requirement for residential contractors?
A) $100,000
B) $250,000
C) $500,000
D) $1,000,000
Answer: C – $500,000
Explanation: Act 757 (SB 326), effective June 2, 2026, increased the minimum general
liability insurance for residential, mold remediation, and home improvement contractors from
$100,000 to $500,000. Contractors must also provide proof of coverage for a minimum of
six months covering all licensed scopes of work .
Q4. What is the minimum net worth requirement for a commercial contractor license
applicant in Louisiana?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: B – $10,000
Explanation: Applicants must provide a current financial statement showing a minimum net
worth of $10,000. The financial statement must be current within 12 months of the
application date .
,Q5. Which of the following entities is NOT eligible to be designated as a Qualifying
Party for a contractor license?
A) A sole proprietor or spouse of a sole proprietor
B) Any current full-time employee of the applicant
C) Any stockholder, officer, or incorporator of a corporation
D) An independent contractor not employed by the company
Answer: D – An independent contractor not employed by the company
Explanation: According to LSLBC regulations, a Qualifying Party can be a sole proprietor
or spouse, a current full-time employee, a stockholder/officer/incorporator of a corporation, a
partner of a partnership, or a member/manager of an LLC. An independent contractor is not
eligible .
Q6. Under Louisiana law, what is the definition of "residential structure" for licensing
purposes?
A) Any building with more than four stories
B) A building or structure used primarily for occupancy by a person as a residence
C) Any commercial building with residential units
D) Any structure with a roof
Answer: B – A building or structure used primarily for occupancy by a person as a
residence
Explanation: A residential structure includes single-family dwellings and duplexes not more
than three floors in height, and structures part of or adjacent to the building. Structures more
than three floors in height require a Building Construction license .
Q7. What is the threshold for requiring a license for residential roofing work under
Act 422 (effective January 1, 2026)?
A) $1,000
B) $5,000
C) $7,500
D) $10,000
Answer: C – $7,500
Explanation: Act 422, effective January 1, 2026, requires contractors performing residential
roofing work valued at $7,500 or more to hold a residential roofing or residential
construction license .
, Q8. Which of the following is a NEW disciplinary violation created by Act 757 (2026)?
A) Failure to renew license on time
B) Failure to pay for materials or services when funds have been received from a client for
that purpose
C) Failure to display license number on advertising
D) Failure to maintain a physical office
Answer: B – Failure to pay for materials or services when funds have been received
from a client
Explanation: Act 757 created several new grounds for disciplinary action, including failure
to pay for materials or services when funds have been received from a client for that
purpose. Also included are material misrepresentations in permit applications and damaging
property to induce a property owner to execute a contract .
Q9. What is the maximum fine the LSLBC can impose under Act 757?
A) $5,000 flat fee
B) Up to 10% of total contract value, or up to $10,000 where contract value cannot be
determined
C) $50,000 flat fee
D) Up to 25% of total contract value
Answer: B – Up to 10% of total contract value, or up to $10,000 where contract value
cannot be determined
Explanation: Act 757 allows fines to reach up to 10% of total contract value. Where
contract value cannot be determined, fines may reach up to $10,000. The Board may also
recover administrative costs and attorney fees .
Q10. Under the 2026 regulations, contractors are expressly PROHIBITED from which
of the following activities?
A) Advertising services on social media
B) Interpreting insurance policies for clients
C) Using subcontractors on projects
D) Offering warranties on work performed
Answer: B – Interpreting insurance policies for clients
Explanation: Act 757 expressly prohibits contractors from: interpreting insurance policies
for clients, adjusting insurance claims, providing work agreements without good-faith cost
