ALABAMA GENERAL CONTRACTOR
LICENSING REAL EXAM 100 QUESTIONS AND
CORRECT ANSWERS WITH RATIONALES
LATEST 2025-2026 UPDATE
SECTION 1: Alabama Contractor Law & Business (1–25)
1. In Alabama, a general contractor license is required for commercial
projects costing:
A. $10,000 or more
B. $25,000 or more
C. $50,000 or more
D. $100,000 or more
Answer: C
Rationale: Alabama law requires licensing for commercial projects
$50,000 or more, including labor and materials.
2. Which board regulates general contractor licensing in Alabama?
A. Alabama Department of Commerce
B. Alabama Secretary of State
C. Alabama Licensing Board for General Contractors
D. Alabama Department of Labor
,Answer: C
Rationale: The ALBGC administers licensing, testing, and
enforcement.
3. How often must an Alabama general contractor license be renewed?
A. Annually
B. Biennially
C. Every 3 years
D. Every 5 years
Answer: B
Rationale: Alabama contractor licenses are renewed every two years.
4. Which of the following is required to obtain an Alabama general
contractor license?
A. Proof of bonding
B. Financial statement prepared by a CPA
C. Proof of residency in Alabama
D. Union membership
Answer: B
Rationale: A CPA-prepared financial statement is mandatory.
5. A contractor performing work without a license may face:
A. Verbal warning only
B. Civil penalties and contract unenforceability
C. Suspension but no fines
D. No legal consequences
, Answer: B
Rationale: Unlicensed contractors may face fines, penalties, and
inability to enforce contracts.
6. What type of entity limits personal liability?
A. Sole proprietorship
B. Partnership
C. Corporation
D. DBA
Answer: C
Rationale: Corporations and LLCs provide limited liability protection.
7. A written contract is most important because it:
A. Speeds construction
B. Protects both parties legally
C. Reduces labor costs
D. Eliminates inspections
Answer: B
Rationale: Contracts clearly define obligations and protect legal rights.
8. Who is responsible for obtaining building permits?
A. Subcontractor
B. Owner
C. General contractor
D. Architect
LICENSING REAL EXAM 100 QUESTIONS AND
CORRECT ANSWERS WITH RATIONALES
LATEST 2025-2026 UPDATE
SECTION 1: Alabama Contractor Law & Business (1–25)
1. In Alabama, a general contractor license is required for commercial
projects costing:
A. $10,000 or more
B. $25,000 or more
C. $50,000 or more
D. $100,000 or more
Answer: C
Rationale: Alabama law requires licensing for commercial projects
$50,000 or more, including labor and materials.
2. Which board regulates general contractor licensing in Alabama?
A. Alabama Department of Commerce
B. Alabama Secretary of State
C. Alabama Licensing Board for General Contractors
D. Alabama Department of Labor
,Answer: C
Rationale: The ALBGC administers licensing, testing, and
enforcement.
3. How often must an Alabama general contractor license be renewed?
A. Annually
B. Biennially
C. Every 3 years
D. Every 5 years
Answer: B
Rationale: Alabama contractor licenses are renewed every two years.
4. Which of the following is required to obtain an Alabama general
contractor license?
A. Proof of bonding
B. Financial statement prepared by a CPA
C. Proof of residency in Alabama
D. Union membership
Answer: B
Rationale: A CPA-prepared financial statement is mandatory.
5. A contractor performing work without a license may face:
A. Verbal warning only
B. Civil penalties and contract unenforceability
C. Suspension but no fines
D. No legal consequences
, Answer: B
Rationale: Unlicensed contractors may face fines, penalties, and
inability to enforce contracts.
6. What type of entity limits personal liability?
A. Sole proprietorship
B. Partnership
C. Corporation
D. DBA
Answer: C
Rationale: Corporations and LLCs provide limited liability protection.
7. A written contract is most important because it:
A. Speeds construction
B. Protects both parties legally
C. Reduces labor costs
D. Eliminates inspections
Answer: B
Rationale: Contracts clearly define obligations and protect legal rights.
8. Who is responsible for obtaining building permits?
A. Subcontractor
B. Owner
C. General contractor
D. Architect
