CSLB Law and Business: Business Organization and Licensing
Section 1 of CSLB’s Law and Business study guide · about 13% of the exam
115 questions across every section on the 3½-hour clock, with a score for organization and licensing so you know where you stand.
Free organization and licensing drillA licensed contractor whose business name refers to concrete holds only a C-8 classification and wants to start doing whole-house remodels under a second business name. What does the license law permit?
Business Organization and Licensing on the Law and Business exam
Sole ownerships, partnerships, corporations and LLCs, qualifiers, license classifications, bonds, renewals and the rules on advertising and hiring subcontractors.
- Share of the exam
- About 13% (CSLB study guide); 15 of the 115 questions in our practice exam
- CSLB’s topics
- Company organization · Licensing requirements · Advertising and subcontracting
- Our drill
- 10 questions from 54 organization and licensing questions, untimed, an explanation after every answer; one free attempt, unlimited with a pass
What organization and licensing questions test
- How each business form holds a license: sole owner, partnership, corporation, limited liability company and joint venture, and who can act as the qualifying individual (RMO or RME)
- License classifications (A, B, B-2, C and D), what a General Building (B) contractor may contract for, and when work needs no license
- Bonds and filings: the $25,000 contractor bond, the bond of qualifying individual, the LLC worker bond and liability insurance, and the changes you must report to CSLB
- Renewal, inactive licenses, reactivation, and what happens to a license when its qualifier leaves
- Advertising: the license number in contracts, bids and advertising, home improvement salespersons, and what unlicensed contracting costs
- Hiring subcontractors: checking their licenses and the workers’ compensation status of the people you hire
Sit the full exam under the real clock
115 questions across every section on the 3½-hour clock, with a score for organization and licensing so you know where you stand.
Free organization and licensing drillHow to study it
- Read the license law chapter of the California Contractors License Law & Reference Book (free on cslb.ca.gov) once end to end; most questions in this section come straight from it.
- Make a table of every deadline and dollar amount in the license law you meet (bond amounts, reporting deadlines, renewal timing) and review it weekly.
- For each business form, know who signs the application, who qualifies the license and what happens when that person leaves.
Common questions
What is on the Business Organization and Licensing section?
Company organization, licensing requirements, and advertising and subcontracting: the three bullet points CSLB lists for section 1 of the Law and Business study guide. CSLB weights the section at about 13% of the exam.
Where do these questions come from?
Mostly from the Contractors State License Law in the Business and Professions Code (section 7000 and following) and CSLB’s regulations in Title 16 of the California Code of Regulations. Both are in the Contractors License Law & Reference Book, which CSLB lists as a study resource and posts free on its website.
115 questions across every section on the 3½-hour clock, with a score for organization and licensing so you know where you stand.
Free organization and licensing drillThe other Law and Business sections
Section topics and weight from CSLB study guide: Law and Business (13E-LAW, 03-2026), checked November 2026.
Original independent practice questions written to CSLB’s published study guide outline. Not affiliated with or endorsed by the Contractors State License Board (CSLB) or PSI.