CSLB - Law and Business Exam QUESTIONS AND ANSWERS ALL CORRECT
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Course
CSLB
Institution
Liberty University
2 types of qualifying individuals for each type of license Correct Answer: Individual - Responsible Managing Employee (RME) or Owner
Partnership - Qualifying Partner or RME
Corporation - Responsible managing officer (RMO) or RME
LLC - RME, RMO, Responsible Managing member/manager
What must b...
cslb law and business exam questions and answers all correct
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CSLB
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CSLB - Law and Business Exam QUESTIONS AND ANSWERS ALL CORRECT
2 types of qualifying individuals for each type of license Correct Answer: Individual -
Responsible Managing Employee (RME) or Owner
Partnership - Qualifying Partner or RME
Corporation - Responsible managing officer (RMO) or RME
LLC - RME, RMO, Responsible Managing member/manager
What must be filed w/CSLB if RME/RMO leaves? Within how long? If not, what happens?
Correct Answer: "Notice of disassociation" and "application for replacing qualifying
individual".
Within 20 days
Or license automatically suspended
Responsible Managing Employee (RME) Correct Answer: Full time employee works at least 32
hours or 80% of operating time of biz, whichever is less.
May be used to qualify for individual, partnership, or corp license.
Never more than 3 licensees at one time.
Can only act as qualifier for 1 license at a time unless either: 1) other licensee is subsidiary 2)
he/she owns at least 20% of licensee 3) majority of officers/partners of other one also are those
of 1st
Responsible Managing Officer (RMO) Correct Answer: Officer of Corp
Journeyman Correct Answer: A person who has completed an apprecnticeship program or is an
experienced worker, not a trainee, and is fully qualified to perform the trade without supervision.
Foreman/Supervisor Correct Answer: A person who has the knowledge/skill of a journeyman
and directly supervises physical construction
What are penalties for contracting w/out a license Correct Answer: - Misdemeanor offense
- 1st offense may receive citation from registrar, potential sentence of up to 6 months in jail
and/or $500 fine, which is accompanied by civil penalty of no less than $200 and no more than
$15,000. May lessen or waive if contractor obtains license within prescribed period of time.
- Felony charges for contracting w/out a license in emergency projects.
- 2nd offense found guilty of criminal offense which is punishable by civil penalty of 20%
contract price or $4,500, whichever is greater, and county jail min 90 days.
Penalty for advertising for work outside of your license Correct Answer: fine of $700-$1000
Penalty for hiring unlicensed sub or allowing use of license Correct Answer: Citation from
registrar and civil penalty up to $15,000
Penalty for deliberate fraudulent use of contractor's license Correct Answer: Up to $10,000
and/or one year jail
, Bond must be filed with _ within _ days of effective date of bond. Correct Answer: CSLB ; 90
Contractor's Bond amount Correct Answer: $15,000
Performance Bond Correct Answer: guarantees job will be completed according to building
plans and specs. If work is unacceptable or project is abandoned, bonding company can hire
another contractor to complete the work or settle for damages.
Payment Bond Correct Answer: Guarantee to the owner that no liens for materials or labor will
be filed against the property.
Contract Bond Correct Answer: Guarantees both job completion and payment of all labor and
materials.
Bid Shopping Correct Answer: When prime contractor discloses sub's bid to other subs to get
them to lower their price.
Bid Peddling Correct Answer: When a sub whose bid wasn't chosen lowers bid in attempt to
induce contractor to pick them instead.
The Listing Law Correct Answer: Applies to state and local public works projects.
Requires contractor to include in their bid name, place of business, and license # of each sub
whose bid is .5% or more of total bid or $10,000 or more, whichever is greater, and the portion
of work performed by each sub.
If contractor violates, public entity may cancel contract or assess penalty of not more than 10%
of amount of subcontract involved. May also be subjected to discipline by CSLB.
If material change is made by public entity to its invitation to bid w/in 72 hours of bid closing,
what has to happen? Correct Answer: Must extend deadline by no less than 72 hours.
Reasons public entity can give consent for contractor to substitute a sub. Correct Answer:
Failure to execute contract
Insolvency
Failure to perform subcontract
Failure to furnish bonds
Clerical error
Unlicensed
Failure to perform work
Failure to pay prevailing wages
Not qualified
Public emergency or necessity (only after written finding)
If contractor requests substitution of sub on public job, public entity is required to___? Correct
Answer: Give written notice to sub of request and reason for it by certified mail. Sub has 5
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