CSLB B LICENSE GENERAL CONTRACTOR
FINAL STUDY SHEET 2026 QUESTIONS
SOLUTIONS GRADED A+
⩥ Which business entity allows its owners to report income as personal
income while enjoying limited liability?
Answer: LLC
⩥ What is the purpose of a mechanics lien
Answer: To ensure payment for labor or materials used in a project.
⩥ What financial statement summarizes a company's assets, liabilities,
and equity.
Answer: Balance sheet
⩥ What is the penalty for failing to secure workers' compensation
insurance for employees?
Answer: Stop order to halt all work, fines up to $100,000, and
misdemeanor criminal charges.
⩥ Under California law, how long does a homeowner have to cancel a
home improvement contract if they are over 65 years old?
Answer: 5 "business" days without penalty or obligation.
, ⩥ How often must a contractor renew their license in California?
Answer: Every 2 years.
⩥ What type of insurance is mandatory for all limited liability
companies (LLCs) in California?
Answer: Commercial general liability insurance valued at $1 million
dollars.
⩥ What is the monetary fine for an unlicensed contractor acting as a
contractor in California?
Answer: $200 and up to $15,000
⩥ What must a contractor disclose to a homeowner if they do not carry
commercial general liability insurance?
Answer: They must notify the homeowner in writing.
⩥ How many classifications of contractor's licenses does CSULB
regulate
Answer: Over 40
⩥ In California, which type of contractor is required to carry a $100,000
bond in addition to the $25,000 contractor bond?
Answer: Limited Liability Company (LLC)
FINAL STUDY SHEET 2026 QUESTIONS
SOLUTIONS GRADED A+
⩥ Which business entity allows its owners to report income as personal
income while enjoying limited liability?
Answer: LLC
⩥ What is the purpose of a mechanics lien
Answer: To ensure payment for labor or materials used in a project.
⩥ What financial statement summarizes a company's assets, liabilities,
and equity.
Answer: Balance sheet
⩥ What is the penalty for failing to secure workers' compensation
insurance for employees?
Answer: Stop order to halt all work, fines up to $100,000, and
misdemeanor criminal charges.
⩥ Under California law, how long does a homeowner have to cancel a
home improvement contract if they are over 65 years old?
Answer: 5 "business" days without penalty or obligation.
, ⩥ How often must a contractor renew their license in California?
Answer: Every 2 years.
⩥ What type of insurance is mandatory for all limited liability
companies (LLCs) in California?
Answer: Commercial general liability insurance valued at $1 million
dollars.
⩥ What is the monetary fine for an unlicensed contractor acting as a
contractor in California?
Answer: $200 and up to $15,000
⩥ What must a contractor disclose to a homeowner if they do not carry
commercial general liability insurance?
Answer: They must notify the homeowner in writing.
⩥ How many classifications of contractor's licenses does CSULB
regulate
Answer: Over 40
⩥ In California, which type of contractor is required to carry a $100,000
bond in addition to the $25,000 contractor bond?
Answer: Limited Liability Company (LLC)
