NASCLA BUSINESS LAW AND MANAGMENT EXAM SC | COMPLETE
QUESTIONS AND ANSWER | 2026 LATEST UPDATED
Sole Proprietorship - (Answer)a business owned and managed by a single individual
Simplest form to set up
unlimited Liability
Partnerships - (Answer)Business organizations in which two or more persons share
responsibilities, costs, profits, and losses.
C Corporations - (Answer)Corporations that have no restrictions on who owns their shares or
the number of shareholders; they cannot qualify for subchapter S tax treatment and are subject
to direct taxation
S corporation - (Answer)A unique government creation that looks like a corporation but is taxed
like sole proprietorships and partnerships
No more than 100 shareholders
FILING IRS FORM 2553
Limited liability company - (Answer)A business organization in which the business (not the
owner) is liable for the company's debts
joint venture - (Answer)an agreement between two or more companies to share a business
project
Reserving business Name - (Answer)Register with secretary of state
,Purpose of licensing - (Answer)Protect Health, Safety, and welfare of the public
When is a Contractors license Needed? - (Answer)Excess of $5000
cease and desist order - (Answer)ruling requiring a company to stop an unfair business practice
from performing work without a license
Monetary limitations for general and mechanical contractors - (Answer)determined by the
financial net worth of the entity seeking licensure
Group Limitations - (Answer)Divided into groups according to net worth.
Reciprocity - (Answer)South Carolina has a reciprocal agreement with certain states but licensee
must still pass the business and law exam.
Property insurance - (Answer)A type of insurance that covers damage to property, such as a
home.
liability insurance - (Answer)insurance that provides protection from claims arising from injuries
or damage to other people or property
Business Owners Policy (BOP) - (Answer)Property and liability Coverage are bundles under
business owners policies
Automobile Insurance - (Answer)Provides payments for both liability and physical damage to
vehicles
,Burglary and Theft Insurance - (Answer)Loss or damage by burglary, theft, Larceny, Robbery,
Forgery, Fraud, and vandalism.
Key Man Life Insurance - (Answer)This type of insurance is available as life insurance or disability
insurance to protect continuing sucess of your business.
Coverage Gaps and Overlaps - (Answer)It is important to evaluate all your insurance coverage.
Using one insurer may minimize gaps and overlaps in coverage.
Bid Documents include - (Answer)An invitation to Bid
Bid instructions
Bid forms
Supplements
Ethics in bidding - (Answer)Bid Shopping
Bid Peddling
Bid Rigging
Bid Shopping - (Answer)The practice of revealing the sub-bid of one subcontractor to obtain a
lower price from another subcontractor.
Bid Peddling - (Answer)approaching the general contractor once you won the job and try to get
the price lower
bid rigging - (Answer)Contractors Coordinate their bids to fix the award outcome of a project
Total Material Unit Cost - (Answer)Price Per unit x Number of units Needed
, Required Contract Elements - (Answer)Acceptance, Consideration, competent parties, and legal
purpose
Contract Provisions - (Answer)Contract price and payment terms
obligation of the parties
breach of contract
breach of contract - (Answer)one party fails to fulfill contract
boiler plate provisions - (Answer)Contain standard Language designed to protect you in the
event of a lawsuit
Provisions to limit Risk - (Answer)Limit the liability of the contracting parties by addressing
allocation of risk
recitals - (Answer)Appears at the beginning of the contract and is intended to give background
information
Types of Contsruction Contracts - (Answer)adress who is responsible for cost savings and
overuns for estimated work
Sources of Contracts - (Answer)American institute of Architechs (AIA)
Associated General Contractors (AGC)
Change Order - (Answer)Written order to make a change in a contract
QUESTIONS AND ANSWER | 2026 LATEST UPDATED
Sole Proprietorship - (Answer)a business owned and managed by a single individual
Simplest form to set up
unlimited Liability
Partnerships - (Answer)Business organizations in which two or more persons share
responsibilities, costs, profits, and losses.
C Corporations - (Answer)Corporations that have no restrictions on who owns their shares or
the number of shareholders; they cannot qualify for subchapter S tax treatment and are subject
to direct taxation
S corporation - (Answer)A unique government creation that looks like a corporation but is taxed
like sole proprietorships and partnerships
No more than 100 shareholders
FILING IRS FORM 2553
Limited liability company - (Answer)A business organization in which the business (not the
owner) is liable for the company's debts
joint venture - (Answer)an agreement between two or more companies to share a business
project
Reserving business Name - (Answer)Register with secretary of state
,Purpose of licensing - (Answer)Protect Health, Safety, and welfare of the public
When is a Contractors license Needed? - (Answer)Excess of $5000
cease and desist order - (Answer)ruling requiring a company to stop an unfair business practice
from performing work without a license
Monetary limitations for general and mechanical contractors - (Answer)determined by the
financial net worth of the entity seeking licensure
Group Limitations - (Answer)Divided into groups according to net worth.
Reciprocity - (Answer)South Carolina has a reciprocal agreement with certain states but licensee
must still pass the business and law exam.
Property insurance - (Answer)A type of insurance that covers damage to property, such as a
home.
liability insurance - (Answer)insurance that provides protection from claims arising from injuries
or damage to other people or property
Business Owners Policy (BOP) - (Answer)Property and liability Coverage are bundles under
business owners policies
Automobile Insurance - (Answer)Provides payments for both liability and physical damage to
vehicles
,Burglary and Theft Insurance - (Answer)Loss or damage by burglary, theft, Larceny, Robbery,
Forgery, Fraud, and vandalism.
Key Man Life Insurance - (Answer)This type of insurance is available as life insurance or disability
insurance to protect continuing sucess of your business.
Coverage Gaps and Overlaps - (Answer)It is important to evaluate all your insurance coverage.
Using one insurer may minimize gaps and overlaps in coverage.
Bid Documents include - (Answer)An invitation to Bid
Bid instructions
Bid forms
Supplements
Ethics in bidding - (Answer)Bid Shopping
Bid Peddling
Bid Rigging
Bid Shopping - (Answer)The practice of revealing the sub-bid of one subcontractor to obtain a
lower price from another subcontractor.
Bid Peddling - (Answer)approaching the general contractor once you won the job and try to get
the price lower
bid rigging - (Answer)Contractors Coordinate their bids to fix the award outcome of a project
Total Material Unit Cost - (Answer)Price Per unit x Number of units Needed
, Required Contract Elements - (Answer)Acceptance, Consideration, competent parties, and legal
purpose
Contract Provisions - (Answer)Contract price and payment terms
obligation of the parties
breach of contract
breach of contract - (Answer)one party fails to fulfill contract
boiler plate provisions - (Answer)Contain standard Language designed to protect you in the
event of a lawsuit
Provisions to limit Risk - (Answer)Limit the liability of the contracting parties by addressing
allocation of risk
recitals - (Answer)Appears at the beginning of the contract and is intended to give background
information
Types of Contsruction Contracts - (Answer)adress who is responsible for cost savings and
overuns for estimated work
Sources of Contracts - (Answer)American institute of Architechs (AIA)
Associated General Contractors (AGC)
Change Order - (Answer)Written order to make a change in a contract
