LOUISIANA CONTRACTOR'S EXAM - BUSINESS AND LAW QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027
Section One: Questions 1–100
Under the Louisiana State Licensing Board for Contractors (LSLBC) regulations, how long must a contractor maintain records of all
business transactions and jobs completed?
A. 1 year
B. 3 years
C. 5 years
D. 7 years
🟢 Correct answer C. 5 years
🔴 RATIONALE: The LSLBC requires licensed contractors to preserve all books, records, and files relating to their contracting activity
for at least 5 years from the date of completion of the work.
A contractor who operates as a sole proprietorship wants to form a Limited Liability Company (LLC). What must be filed first with the
Louisiana Secretary of State?
A. Articles of Incorporation
B. Articles of Organization
C. Partnership Agreement
D. Operating Certificate
🟢 Correct answer B. Articles of Organization
🔴 RATIONALE: In Louisiana, forming an LLC requires filing Articles of Organization along with an Initial Report and the requisite
filing fee with the Secretary of State.
Which of the following defines an independent contractor versus an employee under Louisiana labor guidelines?
A. The frequency of payment or compensation
B. The specific hours set for the daily shift
C. The degree of control the hiring entity exerts over the methods of work
D. The location where materials are purchased for the project
🟢 Correct answer C. The degree of control the hiring entity exerts over the methods of work
🔴 RATIONALE: The primary legal test for determining independent contractor status in Louisiana is the "right of control" over how
the work is executed, rather than just the final result.
If a residential contractor violates the Louisiana New Home Warranty Act by failing to fix a major structural defect, how long does the
owner have to file a claim after the expiration of the warranty period?
A. 30 days
B. 6 months
,C. 1 year
D. 2 years
🟢 Correct answer C. 1 year
🔴 RATIONALE: Under the Louisiana New Home Warranty Act (LA R.S. 9:3146), any action to enforce the warranty must be
commenced within 1 year after the expiration of the applicable warranty period.
What is the standard state-level corporate income tax rate structure configuration in Louisiana classified as?
A. Flat rate tax
B. Regressive tax
C. Graduated/progressive tax
D. Value-added tax
🟢 Correct answer C. Graduated/progressive tax
🔴 RATIONALE: Louisiana imposes a graduated corporate income tax rate structure that increases as the brackets of net corporate
income increase.
Under the Federal Insurance Contributions Act (FICA), which percentage matching obligation does an employer have for Social
Security?
A. 1.45%
B. 4.2%
C. 6.2%
D. 7.65%
🟢 Correct answer C. 6.2%
🔴 RATIONALE: The employer matching share for Social Security under FICA is 6.2% on wages up to the maximum taxable earnings
cap, while Medicare is 1.45%.
According to Louisiana Lien Law, a Private Works Act Lien must be preserved by filing a statement of claim or privilege within how
many days of filing a notice of termination?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
🟢 Correct answer A. 30 days
🔴 RATIONALE: Under the Louisiana Private Works Act, if a Notice of Termination is properly filed, general contractors and
subcontractors must file their Statement of Claim or Privilege within 30 days.
, When a contractor bids on a public work project in Louisiana, what is the maximum percentage of the bid amount typically required for
a bid bond?
A. 2%
B. 5%
C. 10%
D. 15%
🟢 Correct answer B. 5%
🔴 RATIONALE: Louisiana Public Bid Law (LA R.S. 38:2218) states that the public entity shall require a bid bond or certified check
equal to 5% of the bid amount.
An employer fails to pay an employee their final wages within the time frame designated by Louisiana law upon termination. The
employer may be liable for up to how many days of penalty wages?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
🟢 Correct answer C. 90 days
🔴 RATIONALE: Under LA R.S. 23:632, an employer who fails to comply with final pay provisions shall be liable for up to 90 days of
penalty wages or full wages from the time of demand until paid, whichever is less.
What type of insurance policy covers damages to a building under construction due to fire, windstorms, or vandalism?
A. Workers Compensation
B. General Liability
C. Builders Risk
D. Errors and Omissions
🟢 Correct answer C. Builders Risk
🔴 RATIONALE: Builders Risk insurance is a specialized property insurance policy that covers buildings or structures while they are
under construction or renovation against direct physical loss.
What is the penalty for a person who performs contracting work in Louisiana without a valid license when a license is required by law?
A. Civil penalty up to $100 per day
B. Misdemeanor conviction and fine up to $500 per day of violation
C. A flat fine of $5,000 only
D. Automatic permanent blacklisting from future licensure
🟢 Correct answer B. Misdemeanor conviction and fine up to $500 per day of violation
RATIONALES 2026 Q&A |LATEST EXAM UPDATE 2026/2027
Section One: Questions 1–100
Under the Louisiana State Licensing Board for Contractors (LSLBC) regulations, how long must a contractor maintain records of all
business transactions and jobs completed?
A. 1 year
B. 3 years
C. 5 years
D. 7 years
🟢 Correct answer C. 5 years
🔴 RATIONALE: The LSLBC requires licensed contractors to preserve all books, records, and files relating to their contracting activity
for at least 5 years from the date of completion of the work.
A contractor who operates as a sole proprietorship wants to form a Limited Liability Company (LLC). What must be filed first with the
Louisiana Secretary of State?
A. Articles of Incorporation
B. Articles of Organization
C. Partnership Agreement
D. Operating Certificate
🟢 Correct answer B. Articles of Organization
🔴 RATIONALE: In Louisiana, forming an LLC requires filing Articles of Organization along with an Initial Report and the requisite
filing fee with the Secretary of State.
Which of the following defines an independent contractor versus an employee under Louisiana labor guidelines?
A. The frequency of payment or compensation
B. The specific hours set for the daily shift
C. The degree of control the hiring entity exerts over the methods of work
D. The location where materials are purchased for the project
🟢 Correct answer C. The degree of control the hiring entity exerts over the methods of work
🔴 RATIONALE: The primary legal test for determining independent contractor status in Louisiana is the "right of control" over how
the work is executed, rather than just the final result.
If a residential contractor violates the Louisiana New Home Warranty Act by failing to fix a major structural defect, how long does the
owner have to file a claim after the expiration of the warranty period?
A. 30 days
B. 6 months
,C. 1 year
D. 2 years
🟢 Correct answer C. 1 year
🔴 RATIONALE: Under the Louisiana New Home Warranty Act (LA R.S. 9:3146), any action to enforce the warranty must be
commenced within 1 year after the expiration of the applicable warranty period.
What is the standard state-level corporate income tax rate structure configuration in Louisiana classified as?
A. Flat rate tax
B. Regressive tax
C. Graduated/progressive tax
D. Value-added tax
🟢 Correct answer C. Graduated/progressive tax
🔴 RATIONALE: Louisiana imposes a graduated corporate income tax rate structure that increases as the brackets of net corporate
income increase.
Under the Federal Insurance Contributions Act (FICA), which percentage matching obligation does an employer have for Social
Security?
A. 1.45%
B. 4.2%
C. 6.2%
D. 7.65%
🟢 Correct answer C. 6.2%
🔴 RATIONALE: The employer matching share for Social Security under FICA is 6.2% on wages up to the maximum taxable earnings
cap, while Medicare is 1.45%.
According to Louisiana Lien Law, a Private Works Act Lien must be preserved by filing a statement of claim or privilege within how
many days of filing a notice of termination?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
🟢 Correct answer A. 30 days
🔴 RATIONALE: Under the Louisiana Private Works Act, if a Notice of Termination is properly filed, general contractors and
subcontractors must file their Statement of Claim or Privilege within 30 days.
, When a contractor bids on a public work project in Louisiana, what is the maximum percentage of the bid amount typically required for
a bid bond?
A. 2%
B. 5%
C. 10%
D. 15%
🟢 Correct answer B. 5%
🔴 RATIONALE: Louisiana Public Bid Law (LA R.S. 38:2218) states that the public entity shall require a bid bond or certified check
equal to 5% of the bid amount.
An employer fails to pay an employee their final wages within the time frame designated by Louisiana law upon termination. The
employer may be liable for up to how many days of penalty wages?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
🟢 Correct answer C. 90 days
🔴 RATIONALE: Under LA R.S. 23:632, an employer who fails to comply with final pay provisions shall be liable for up to 90 days of
penalty wages or full wages from the time of demand until paid, whichever is less.
What type of insurance policy covers damages to a building under construction due to fire, windstorms, or vandalism?
A. Workers Compensation
B. General Liability
C. Builders Risk
D. Errors and Omissions
🟢 Correct answer C. Builders Risk
🔴 RATIONALE: Builders Risk insurance is a specialized property insurance policy that covers buildings or structures while they are
under construction or renovation against direct physical loss.
What is the penalty for a person who performs contracting work in Louisiana without a valid license when a license is required by law?
A. Civil penalty up to $100 per day
B. Misdemeanor conviction and fine up to $500 per day of violation
C. A flat fine of $5,000 only
D. Automatic permanent blacklisting from future licensure
🟢 Correct answer B. Misdemeanor conviction and fine up to $500 per day of violation
