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NASCLA Contractors Guide
When a business is purchased by a new owner, what happens in regards to the
"EIN"? - CORRECT ANSWER-A new EIN is required
A clause that means that a subcontractor is bound by the same obligations as
are required of the general contractor is called: - CORRECT
ANSWER-Flow-down clause
What are the three key functions on a business plan? - CORRECT
ANSWER-Planning Tool, Loan or Investor Document, Benchmarking tool
A contractor's Business Plan does NOT include? - CORRECT
ANSWER-Contract Documents
Which business structure is considered the simplest to setup? - CORRECT
ANSWER-Sole Proprietorship
What is the major disadvantage of a sole proprietorship? - CORRECT
ANSWER-Unlimited person liability
Which of the following is the most important when entering into 50/50 partnership
- CORRECT ANSWER-Prepare a written agreement
With. partnership, are you responsible for the actions of your partner? -
CORRECT ANSWER-Yes, if they act in the name of the business
Which individuals have NO managerial decision-making power and have liability
restricted to the amount of the investment? - CORRECT ANSWER-Limited
partners
A partnership dissolves leaving debt of $50,000. How is each partner liable? -
CORRECT ANSWER-Each partner is liable for the entire amount
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s Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$
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A _________ is a legal relationship where two or more persons are contractually
associated as principals in a business? - CORRECT ANSWER-General
partnership
Three people join together to form a partnership. One of the partners failed to
meet their financial obligations. The other two partners can.. - CORRECT
ANSWER-be forced to pay
What is one of the ADVANTAGES of a partnership? - CORRECT
ANSWER-Partnerships share financial resources
A partnership that is formed outside of your state must register as what type of
partnership? - CORRECT ANSWER-Foreign partnership
To register a foreign LLC, what step must be taken? - CORRECT ANSWER-File
an application for Registration of Foreign LLC with the Secretary of State
What is the main disadvantage of a C Corporation? - CORRECT
ANSWER-Double Taxation - you are taxed once on the corporate profits and
again on dividends to shareholders
What is the main advantage of an S Corporation? - CORRECT ANSWER-You
avoid double taxation
What is an ADVANTAGE of a C Corporation? - CORRECT ANSWER-Limited
liability for debts and actions of the corporation
Which IRS Form is required to elect S corporation status? - CORRECT
ANSWER-Form 2553
What is a primary benefit of an S Corporation? - CORRECT ANSWER-S Corp.
pay taxes only on income distributed to members
What is the advantage of a Limited Liability Corporation (LLC)? - CORRECT
ANSWER-Like an S Corp., Federal income tax is only filed on income distributed
to members
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Joint ventures are typically used when? - CORRECT ANSWER-Two or more
entities want to join together on a special project
With a sole proprietorship, doing business under a different name other than your
own typically requires filing of what document? - CORRECT ANSWER-Fictitious
name certificate with local or state government office
What do you call a special business arrangement that exists between 2 or more
companies to undertake a specific project? - CORRECT ANSWER-Joint venture
Where do you reserve a name for your Company, LLC or Partnership? -
CORRECT ANSWER-The Secretary of State Office
The members of the board are appointed by? - CORRECT ANSWER-The
Governor
A major purpose of Licensing is to: - CORRECT ANSWER-Protect the health,
safety, and welfare of the public.
Who appoints the members on the licensing board? - CORRECT
ANSWER-State Governor
The Georgia License Board is composed of: - CORRECT ANSWER-Each
division has 7 members that serve for 5 years
What is the term period for the members on the licensing board? - CORRECT
ANSWER-5 years
Georgia Residential applicants must show proof of general liability insurance in
the amount of? - CORRECT ANSWER-$300,000
Georgia Commercial applicants must show proof of general liability insurance in
the amount of? - CORRECT ANSWER-$500,000
The state requires you must have a Contractors License if the dollar amount of
the construction exceeds: - CORRECT ANSWER-$2,500
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The State of Georgia requires a Contractors License for construction costs that
exceed? - CORRECT ANSWER-$2,500
Two types of Insurance required for Contractors are: - CORRECT
ANSWER-Workers Comp and General Liability
Your license will be revoked if not renewed within: - CORRECT ANSWER-6
months of expiration date
The continuing education requirements to renew a license in GA are? -
CORRECT ANSWER-Residential Basic: at least 3 hours
Residential Light: 6 hours
What is the minimum fine the Board may impose for operating without a
contractor license? - CORRECT ANSWER-$500
In GA, all jobs over what amount must include a written warranty? - CORRECT
ANSWER-$2,500
Residential contractors must provide a written warranty for: - CORRECT
ANSWER-1 year for work exceeding $2,500
Licenses must be renewed every ____ years - CORRECT ANSWER-2
How often do Contractor Licenses expire in GA? - CORRECT ANSWER-Every 2
years
What is the main purpose of insurance? - CORRECT ANSWER-To supplement
your risk against accidents and theft
What type of insurance should a contractor have to cover losses from theft or
fire? - CORRECT ANSWER-Property insurance
Property insurance typically covers what type of losses? - CORRECT
ANSWER-Your business and personal property when damage, theft or loss
occurs
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NASCLA Contractors Guide
When a business is purchased by a new owner, what happens in regards to the
"EIN"? - CORRECT ANSWER-A new EIN is required
A clause that means that a subcontractor is bound by the same obligations as
are required of the general contractor is called: - CORRECT
ANSWER-Flow-down clause
What are the three key functions on a business plan? - CORRECT
ANSWER-Planning Tool, Loan or Investor Document, Benchmarking tool
A contractor's Business Plan does NOT include? - CORRECT
ANSWER-Contract Documents
Which business structure is considered the simplest to setup? - CORRECT
ANSWER-Sole Proprietorship
What is the major disadvantage of a sole proprietorship? - CORRECT
ANSWER-Unlimited person liability
Which of the following is the most important when entering into 50/50 partnership
- CORRECT ANSWER-Prepare a written agreement
With. partnership, are you responsible for the actions of your partner? -
CORRECT ANSWER-Yes, if they act in the name of the business
Which individuals have NO managerial decision-making power and have liability
restricted to the amount of the investment? - CORRECT ANSWER-Limited
partners
A partnership dissolves leaving debt of $50,000. How is each partner liable? -
CORRECT ANSWER-Each partner is liable for the entire amount
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s Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$
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A _________ is a legal relationship where two or more persons are contractually
associated as principals in a business? - CORRECT ANSWER-General
partnership
Three people join together to form a partnership. One of the partners failed to
meet their financial obligations. The other two partners can.. - CORRECT
ANSWER-be forced to pay
What is one of the ADVANTAGES of a partnership? - CORRECT
ANSWER-Partnerships share financial resources
A partnership that is formed outside of your state must register as what type of
partnership? - CORRECT ANSWER-Foreign partnership
To register a foreign LLC, what step must be taken? - CORRECT ANSWER-File
an application for Registration of Foreign LLC with the Secretary of State
What is the main disadvantage of a C Corporation? - CORRECT
ANSWER-Double Taxation - you are taxed once on the corporate profits and
again on dividends to shareholders
What is the main advantage of an S Corporation? - CORRECT ANSWER-You
avoid double taxation
What is an ADVANTAGE of a C Corporation? - CORRECT ANSWER-Limited
liability for debts and actions of the corporation
Which IRS Form is required to elect S corporation status? - CORRECT
ANSWER-Form 2553
What is a primary benefit of an S Corporation? - CORRECT ANSWER-S Corp.
pay taxes only on income distributed to members
What is the advantage of a Limited Liability Corporation (LLC)? - CORRECT
ANSWER-Like an S Corp., Federal income tax is only filed on income distributed
to members
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Joint ventures are typically used when? - CORRECT ANSWER-Two or more
entities want to join together on a special project
With a sole proprietorship, doing business under a different name other than your
own typically requires filing of what document? - CORRECT ANSWER-Fictitious
name certificate with local or state government office
What do you call a special business arrangement that exists between 2 or more
companies to undertake a specific project? - CORRECT ANSWER-Joint venture
Where do you reserve a name for your Company, LLC or Partnership? -
CORRECT ANSWER-The Secretary of State Office
The members of the board are appointed by? - CORRECT ANSWER-The
Governor
A major purpose of Licensing is to: - CORRECT ANSWER-Protect the health,
safety, and welfare of the public.
Who appoints the members on the licensing board? - CORRECT
ANSWER-State Governor
The Georgia License Board is composed of: - CORRECT ANSWER-Each
division has 7 members that serve for 5 years
What is the term period for the members on the licensing board? - CORRECT
ANSWER-5 years
Georgia Residential applicants must show proof of general liability insurance in
the amount of? - CORRECT ANSWER-$300,000
Georgia Commercial applicants must show proof of general liability insurance in
the amount of? - CORRECT ANSWER-$500,000
The state requires you must have a Contractors License if the dollar amount of
the construction exceeds: - CORRECT ANSWER-$2,500
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s Guide.pdf@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!$$$$$$$$$
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The State of Georgia requires a Contractors License for construction costs that
exceed? - CORRECT ANSWER-$2,500
Two types of Insurance required for Contractors are: - CORRECT
ANSWER-Workers Comp and General Liability
Your license will be revoked if not renewed within: - CORRECT ANSWER-6
months of expiration date
The continuing education requirements to renew a license in GA are? -
CORRECT ANSWER-Residential Basic: at least 3 hours
Residential Light: 6 hours
What is the minimum fine the Board may impose for operating without a
contractor license? - CORRECT ANSWER-$500
In GA, all jobs over what amount must include a written warranty? - CORRECT
ANSWER-$2,500
Residential contractors must provide a written warranty for: - CORRECT
ANSWER-1 year for work exceeding $2,500
Licenses must be renewed every ____ years - CORRECT ANSWER-2
How often do Contractor Licenses expire in GA? - CORRECT ANSWER-Every 2
years
What is the main purpose of insurance? - CORRECT ANSWER-To supplement
your risk against accidents and theft
What type of insurance should a contractor have to cover losses from theft or
fire? - CORRECT ANSWER-Property insurance
Property insurance typically covers what type of losses? - CORRECT
ANSWER-Your business and personal property when damage, theft or loss
occurs
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