NC Business Law Flashcards
1
Q
A major purpose of Licensing is to:
A
Protect the health, safety, and welfare of the public
2
Q
Where should a general contractor’s license be displayed?
A
At the licensee’s place of business
3
Q
The state of North Carolina requires you must have a Contractor’s License if the dollar amount of the construction cost exceeds:
A
$30,000
4
Q
John Smith inherited some money and quit his job. He has decided to build a house for him and his family that they plan to sell within 1 year of completion. His potential cost estimate is $565,000. At this time he is waiting on his building permit so he can begin construction. How has he proceeded?
A
Incorrectly - If you plan to resell a home within one year you must have a builder license
5
Q
If you fail your contractor’s exam when can you retake the exam?
A
30 days after the previous attempt
6
Q
North Carolina defines a general contractor as a person or firm or corporation who enters into construction contracts in the amount of at least?
A
$30,000
7
Q
A company changing its address should report the address change to the NC Licensing Board within how many days?
A
30 days
8
Q
Does a subcontractor need a license if they are working under the supervision of a prime or general contractor?
A
No
9
Q
If an applicant is unable to meet the working capital requirements they can?
A
Present a surety bond in lieu of working capital
10
Q
If a surety bond was used to secure a license and that bond is canceled?
A
The applicant must provide written proof of financial responsibility within thirty days or the license will be suspended.
11
Q
North Carolina contractor licenses expire annually on December 31st. If the license is not renewed within ___ days following expiration, it becomes invalid.
A
60
12
Q
How often do Contractor Licenses expire in North Carolina?
A
Every year
13
Q
Once a contractor’s license expires, what is the period of time before the contractor has to repeat the entire license application process again?
A
4 Years
14
Q
How much does a limited license application cost?
A
75.00
15
Q
What is the fee amount to renew your Intermediate license?
A
100.00
16
Q
According to North Carolina’s “Little Miller” Act, all State construction projects over $300,000.00 require:
A
Performance and Payment Bonds
17
Q
NC law requires every employer to provide Workers’ Compensation who regularly employs how many people?
A
3 or more
18
Q
What is the North Carolina Corporate income tax rate?
A
2.50%
19
Q
What is the purpose of a mechanics’/materialmen’s lien?
A
To attach property to help suppliers and subcontractors to collect monies due.
20
Q
For the purpose of lien law, who is considered to be in direct contract with the owner of the property?
A
The General contractor
21
Q
Within _____ days of the building permit issuance, the general contractor can file a notice of contract with the office of the clerk of superior court. The notice must be posted on the property in a visible location adjacent to the posted building permit.
A
30
22
Q
What is not required on a notice of contract?
A
Date of permit issuance
23
Q
A lien must be filed within ____ days of providing the last labor or materials?
A
120
24
Q
A lien must be foreclosed by commencement of a lawsuit within ______days?
A
180
25
A non-licensed contractor has hired a licensed Contractor to pull permits and supervise the work under the permits. In this scenario, the board could invoke what penalty?
Revoke the license of the "licensed contractor".
26
How many members make up the North Carolina licensing board?
9 Members
27
Who appoints the members on the licensing board?
State Governor
28
How long is the term period for the members on the licensing board?
5 years
29
What is the minimum amount of times the North Carolina Licensing Board for General Contractors meets each year?
2
30
How many members of the board are required to have a quorum?
2
31
If the qualifier ceases to be connected to a licensee how long will the license remain in effect without a new qualifier?
90 days
32
For ninety days after the qualifier leaves the licensee, the licensee shall or shall not do what?
Shall not bid or undertake any additional contracts until the qualifier is replaced
33
A foreign corporation has filed for a Contractor License. What must be done before the license is issued?
The corporation must obtain a certificate of authority from the Secretary of State
34
How many members of the board does it take to deny or revoke a license?
At least 5
35
The board may impose an administrative fine per violation up to?
$5000.00
36
The Board may take disciplinary action if you?
Are fraudulent or deceitful in obtaining a license.
37
If your contractor's license is used to pull or gain a permit, you will execute a verified affidavit attesting to the following:
That the licensed contractor will personally superintend and manage all aspects of the construction and that the duty will not be delegated to any other person without a license.
38
Any person or company that falsely claims to be a licensed contractor can be guilty of
A class II misdemeanor
39
The board may revoke a contractor's license in what circumstance?
If a general contractor licensed is found guilty of gross negligence, incompetency, or misconduct?
40
A contractor has 6 active permitted projects running. As he travels from project to project he needs to delegate some of the supervisory duties. Who can be assigned this responsibility?
No one can be
41
As a General Contractor which (S) specialty would not be covered under your GC license?
Grading and Excavation
42
An applicant, any owner, principal, qualifier must notify the board if they are in bankruptcy or have been in bankruptcy within?
Five years prior to filing for the application
43
For a limited license a general contractor must have assets of ________, or a net worth of at least _________?
$17,000 in Assets or $80,000 Net Worth
44
If an applicant is using a surety bond when applying for an NC Limited license. The applicant shall maintain the bond in the amount of?
$175,000
45
If an applicant is using a surety bond when applying for an NC intermediate license. The applicant shall maintain the bond in the amount of?
$500,000
46
What can happen if you sign a statement or contract, falsely indicating that the work is bonded?
Your license can be revoked
47
If a qualifier ceases to be connected to a licensee, licensee must notify the board within?
10 days of separation
48
The qualifiers credentials will stay active up to __________ if not actively serving as a qualifier or licensed company?
4 years
49
A person may serve as a qualifier for how many licenses?
2
50
After how many consecutive years without being a qualifier for an active licensee does the qualifier's exam credentials get archived?
4 years
51
Once a qualifier's exam credentials are archived, what must they do to activate them again?
retake the exam
52
Within how many days of a qualifier ceasing to be connected to a licensee, must a licensee notify the board (in writing)?
10 Days
53
Two Intermediate licensees with similar classifications, wish to create a joint venture to bid on a $2,000,000 contract. Which of the following is a TRUE statement regarding the situation?
Not able to bid as a joint Venture on this project.
54
In North Carolina the requirements for a qualifier, other than an owner, officer, or partner are?
They must work at least 20 hours a week and must be a W-2 employee
55
When a qualifier ceases to be connected to a licensee, the qualifier is required to?
Notify the Board in writing
56
What happens to a license if it ceases to have any qualifiers?
The license is invalidated
57
A "responsible managing" person for a license applicant means someone who works a minimum of how many hours a week at the company?
20 hours or a majority of the operational hours of the company
58
As defined by G.S. 87-10, a "member of the personnel" of a company must meet which of the following conditions?
Must be a W-2 employee
59
All licensees shall notify the board of any change in the name in which the licensee is conducting business within?
30 days
60
If a public building project is performed pursuant to G .S. 87-1.1, the total amount of work to be performed by all licensed general contractors shall not exceed ____ of the total bid price.
25%
61
Licensee shall provide the board with a copy of any bankruptcy petition filed within?
30 days
62
If a complaint is filed against a contractor the board will notify the contractor in writing within?
30 Days
63
Who may file a complaint against a licensed contractor?
Any person who believes that a person, firm, or corporation is in violation of acts specified in G.S. 87-13
64
Who may file a complaint against an unlicensed contractor
Any person who believes that a person, firm, or corporation is in violation of acts specified in G.S. 87-13
65
Payment and performance bonds for local governmental projects are required when the total amount of construction contracts awarded for any one project exceed ______.
$300,000
66
Payment and performance bonds for a State department or agency (including the UNC system) are required when the sum of all construction contracts for any one project exceed _____.
$500,000
67
How much shall bonds be for when a bond is required for local government contracts?
100% of the contract value
68
A general contractor has a state project valued at $5,000,000. You have been asked to install a staircase as a subcontractor on this project. Are you required to purchase a performance and/or payment bond?
Only if your portion of the project is valued at more than $50,000
69
Per the Model and Payment performance bond, what would be defined include as Labor or material?
All material furnished or labor perform
70
As a subcontractor, to file a claim against the payment bond you must provide written notice within how many days of when your last labor was completed or materials were furnished?
90 days
71
A subcontractor purchased tile from a supplier directly to install on a state project that has a payment bond. The tile supplier has not received payment. How many days does the supplier have to file a claim?
120 days
72
s a subcontractor on a public project, you have not received payment for $32,000 worth of labor and materials. What amount can you file on the claim?
$12,000
73
A general contractor has placed a $3,000,000 claim for payment on a public project. The court awarded the general contractor $2,000,000. The general contractor also has $80,000 in attorney's fees. Who would be responsible for the attorney's fees?
The losing party would be responsible for 100%
74
A payment bond for a state project is active for how long after the last day of labor was performed or material furnished?
1 year
75
A payment bond must include the following provisions:
the date the bond is executed; the name of the principal; the name of the surety; the name of the contracting body; the contract numbe
76
For public bids, if the request to withdraw is denied, the contractor may contest within?
20 days
77
On a public bid a request to withdraw bid must be in writing no later than?
72 hours after the opening of bids
78
How many bids are required on public bid jobs?
3
79
What is the maximum amount of retainage an owner may withhold on all public contracts over $100,000?
5%
80
For public contracts, the balance is due to the prime contractor within how many days?
45
81
What is the maximum amount of retainage on periodic or final payments the owner can withhold for public projects less than $100,000?
0%
82
On public projects subcontractor is to be paid within how many days of the final payment being made?
7
83
What percent interest can be charged for public contracts in which the final payment is delayed by more than forty-five days?
1% per month
84
On public contracts in which the final payment was received by the prime if the subcontractor has not been paid by the eighth day what penalty will be added?
1% interest per month on the outstanding balance
85
The maximum amount of retainage and owner can withhold for a subcontractor that has completed acceptable work is?
.5% of the contract
86
If there is still work to be completed or corrected, but a subcontractor has already finished their part by or before the total project completion is 50%, an owner may retain a maximum amount of _____ of the estimated value of the work to be completed within sixty days of a request.
.5% of the contract
87
All electrical material, devices, equipment or appliances shall have what identifying information?
All of these - Manufacturer's name and trademark, Voltage and current, Wattage
88
What is the penalty removing or altering identification symbols on electrical material?
Class II misdemeanor
89
When does a building permit in which no work has been started will expire?
6 months
90
If work has been discontinued the permit will?
expire in 12 months
91
The owner or builder may appeal a "Stop Work Order" within how many days after issuance?
5 days
92
A defect is discovered in a new building by a local inspector. The building has passed code inspection and has been issued an occupancy certificate. Who is responsible for correcting the defect?
The Owner
93
When is a permit required?
Moving a water heater more than 5 feet
94
Subcontractor has asked to be paid by the prime contractor but the owner has not paid the prime contractor. The prime contractor must ?
Pay the subcontractor regardless if he has received payment are not
95
The General Contractor has received 75% of the total contract payment for a 28 unit apartment complex. A subcontractor that was used has completed their portion of the work satisfactorily. The subcontractor's total bill was 100,000.00 and he has received $75,000 in payments. The outstanding amount owed to the subcontractor shall be?
Paid to the Sub Contractor regardless if the GC has receive payment
96
The right to withhold retainage from a Subcontractor will vary based on the number of how many units on a contract?
12
97
Who has the right to file a claim of lien on property?
Any person who performs or furnishes labor or professional design or surveying services or furnishes materials or furnishes rental equipment pursuant to a contract, either express or implied
98
The owner shall designate a lien agent in which the value of a construction project exceeds?
$30,000
99
In the event that a lien agent resigns or is no longer licensed, the owner shall designate a successor lien agent within?
3 Business Days
100
Claims of lien on real property may be filed at any time after the maturity of the obligation secured thereby but not later than ______ days after the last furnishing of labor or materials.
120 days
101
An action to enforce a claim of lien on real property must be commenced with in how many days?
180
102
A third-tier subcontractor who furnished labor, materials, or rental equipment at the site of the improvement shall be entitled to a lien upon which funds?
Those owed to the second-tier subcontractor with whom the third-tier subcontractor dealt.
103
If any contractor or other person receiving payment from an obligor or from a purchaser or from a lender; knowingly furnish, a false written statement of the sums due or claimed to be due, that person shall be guilty of?
Class 1 misdemeanor
