FOR EXAMINATIONS SCHEDULED ON OR AFTER MARCH 30, 2011

CONTRACTORS STATE LICENSE BOARD

LICENSE EXAMINATION STUDY GUIDE

LAW AND BUSINESS

Content of the Examination 7. Safety Requirements (11%)

• Training and reporting requirements
The Law and Business Examination is divided into • General safety
eight major sections. These sections are: • Hazmat

1. Business Organization (12%) 8. Public Works (5%)

• Company organization • Prevailing wage requirements
• Project organization • Bonding requirements
• Insurance requirements
2. Business Financial (18%)
• Cash management *Percentages are approximate*
• Budget and Planning
• Taxes
• Financial reporting Test Site Policy

3. Employment Requirements (15%) This is a closed-book examination. No

• Employment regulations reference materials may be used during the
• Evaluation and record-keeping examination. All materials brought to the
• Payroll examination site must be left in an unmonitored
area at your own risk.
4. Bonds, Insurance, and Liens (13%)
• Bonds
• Workers’ compensation insurance Test Strategy
• Other insurance
• Liens This is a multiple-choice examination with four
choices per question. Some questions require
5. Contract Requirements and Execution mathematical computation. Examination
(15%) questions are written to provide only one BEST
• Bidding answer and are NOT written as trick questions.
• Labor and cost control
• Contracts All correct answers have equal value. If you
• Payments are unsure about a particular question, it is
better to try to answer the question with the
6. Licensing Requirements (11%) chance to possibly get it correct (and earn one
• Business license point) than it is to leave the question blank and
• Contractors license definitely get it wrong (and lose one point).
• Activity regulation
Ample time is provided to answer all
examination questions, so be sure to read
each question and its four choices completely
and carefully before selecting the BEST
possible answer to the question.
 Sample Questions
The following questions are typical of the types of
items that are on the examination. The correct
answer is marked with “ ”.
1. According to contract law, when ca
subcontractors and material suppliers serve a
preliminary notice?
Cal/OSHA State of California Construction and
Electrical Safety Orders. California Code of
Regulations, Title 8, Industrial Relations,
Division 1, Chapter 4, Subchapter 4. Mangan
Communications.
PHONE: (877) 626-2666.
INTERNET: www.mancomm.com
VIEW ONLINE:
www.dir.ca.gov/dosh/LawsAndRegulations.htm

a. After first purchasing material Standard Specifications for Public Works

b. After their bid is accepted by the prime Construction (Green Book). BNI Building News.
contractor PHONE: (888) 264-2665.
c. After the prime contractor’s bid is FAX: (760) 734-1540.
accepted by the owner INTERNET: www.bnibooks.com
d. After first furnishing labor or materials
Terms of Agreement – Consumer Guide to
2. Within how many days must an “agreement to Home Improvement Contracts. Contractors State
arbitrate” be returned by the participants after License Board.
being mailed by the Registrar? PHONE: (800) 321-2752.
FAX: (916) 255-4535.
a. Within 7 calendar days
INTERNET: www.cslb.ca.gov
b. Within 10 calendar days
c. Within 14 calendar days
Contractors Guide to Business, Law and
d. Within 30 calendars days
Project Management. National Association of
State Contractors Licensing Agencies (NASCLA).
3. How often must contractors’ supervisors
PHONE: (623) 587-9354.
conduct “tool box” or “tailgate” safety
FAX: (623) 587-9625.
meetings?
INTERNET: www.nascla.org.
a. Daily
b. At least every ten working days Publication 15 (Circular E) Employer’s Tax
c. At least once a month Guide . Internal Revenue Service.
d. At least once a quarter PHONE: (800) 829-1040
INTERNET:
*All questions are written and reviewed by licensed www.irs.gov/publications/p15/index.html
contractors who are actively working in the field*
California Employer’s Guide (DE44). California
Employment Development Department.
Resources PHONE: (888) 745-3886.
FAX: (877) 547-4503
Publisher information is provided. Additional INTERNET: www.edd.ca.gov/FORMS
sources for purchasing materials may be available
online. *Publisher information is current as of 2/11*

California Contractors License Law and

Reference Book. Matthew Bender & Company,
Inc.
PHONE: (800) 223-1940.
FAX: (518) 462-3788.
INTERNET: www.lexisnexis.com

13E-71