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2026 Statistics

Key Facts: GA Business & Law Exam

70%

Passing Score

PSI Bulletin

Exam Questions

PSI Bulletin

120 min

Exam Time

PSI Bulletin

$60

PSI Exam Fee

PSI Bulletin

Open Book

Reference Policy

PSI Bulletin

Georgia's 50-question open-book Business & Law Exam covers licensing, estimating and bidding, financial management, tax, labor, project management and lien law, contracts, risk management, and environmental/safety. Passing it once satisfies the Business & Law requirement for every Georgia Residential and General Contractor license. The sole approved reference is the Georgia-NASCLA Contractors Guide to Business, Law and Project Management, 3rd Edition.

Sample GA Business & Law Practice Questions

Try these sample questions to test your GA Business & Law exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under Georgia law, a state residential contractor license is required when the total value of a project's work or compensation exceeds what threshold?

A.$1,000

B.$2,500

C.$5,000

D.$10,000

Explanation: O.C.G.A. § 43-41-2 defines a residential contractor and requires a state license when the total value of the work or the compensation to be received, whichever is higher, exceeds $2,500. Splitting a larger project into sub-$2,500 invoices to avoid the requirement is still unlicensed contracting.

2A candidate passes the Georgia Business & Law Exam. Which statement correctly describes how this satisfies future licensing requirements?

A.The Business & Law pass satisfies the Business & Law requirement for all Georgia Residential and General Contractor licenses

B.The pass is valid only for the specific license classification applied for and must be retaken for each new classification

C.The pass expires after one year and must be retaken if a new license is sought later

D.The pass counts only toward residential-basic licenses; commercial general contractors must take a separate law exam

Explanation: Passing the Georgia Business & Law Exam once satisfies the Business & Law requirement for ALL other Georgia Residential and General Contractor licenses. A candidate who later seeks a different classification in that family need only pass the applicable trade exam, not retake Business & Law.

3Under O.C.G.A. § 43-41-17(b), what is the legal effect when an unlicensed contractor enters into a contract on or after July 1, 2008 for work that requires a license?

A.The contract is valid but the contractor must pay a penalty equal to the contract price

B.The contract is unenforceable in law or in equity by the unlicensed contractor

C.The contract is automatically transferred to a licensed contractor selected by the owner

D.The contract remains enforceable if the contractor obtains a license within 30 days of discovery

Explanation: O.C.G.A. § 43-41-17(b) provides that any contract entered into on or after July 1, 2008 for work requiring a license, between an owner and a contractor who does not hold a valid and current license, is unenforceable in law or in equity by the unlicensed contractor. The contractor cannot sue to collect, cannot file a mechanic's lien, and cannot file a bond claim.

4A candidate is approved for the Georgia Business & Law and Trade exams and receives a one-year eligibility period. Under O.C.G.A. § 43-41-6(g), what happens if the candidate fails either exam twice during that period?

A.The candidate may immediately retake the failed exam after paying a new exam fee

B.The candidate must wait at least one year after the last exam before a third attempt and receives only one attempt in the next eligibility period

C.The candidate must complete 16 hours of continuing education before retaking the exam

D.The candidate's application is permanently denied and cannot be resubmitted

Explanation: Under O.C.G.A. § 43-41-6(g), a first-time approved candidate gets two attempts to pass both the Business & Law and the Trade exam within the one-year eligibility period. If the candidate fails either exam twice, they must wait at least one year after the last exam before a third or subsequent attempt, and in the next eligibility period they receive only one attempt.

5Which of the following correctly describes the Georgia Business & Law Exam administration and format?

A.75 questions, 3 hours, closed book, $100 fee, scaled score of 80 to pass

B.50 questions, 120 minutes, open book, $60 PSI exam fee, 70% to pass

C.100 questions, 180 minutes, open book, $75 fee, 65% to pass

D.40 questions, 90 minutes, closed book, $50 fee, 75% to pass

Explanation: The Georgia Business & Law Exam consists of 50 four-option multiple-choice questions, is 120 minutes long, is open book, has a PSI exam fee of $60, and requires a 70% passing score (35 correct answers). The score appears on screen immediately after completion. The board application fee is separate from the $60 PSI exam fee.

6Which edition of the Georgia-NASCLA Contractors Guide is the sole approved open-book reference for the Georgia Residential and General Contractor Business & Law Exam?

A.1st Edition

B.3rd Edition

C.5th Edition

D.7th Edition

Explanation: The sole approved open-book reference for the Georgia Residential and General Contractor Business & Law Exam is the Georgia-NASCLA Contractors Guide to Business, Law and Project Management, Georgia State Licensing Board for Residential and General Contractors, 3rd Edition. The 5th edition belongs to the separate HVAC, plumbing, and electrical license path.

7Under Georgia law, a residential-light commercial contractor is authorized to work on multifamily and multiuse light commercial buildings. Which set of limitations correctly describes the scope of this license classification?

A.Less than 3 stories and less than 15,000 square feet of interior floor space

B.Less than 4 stories and less than 25,000 square feet of interior floor space for wood or light gauge metal frame construction

C.Up to 5 stories and up to 50,000 square feet for any construction type

D.Up to 4 stories and up to 75,000 square feet for pre-engineered steel buildings

Explanation: O.C.G.A. § 43-41-2(11) defines a residential-light commercial contractor as one who performs residential-basic work plus work on multifamily and multiuse light commercial buildings that are less than four stories in height, less than 25,000 square feet in aggregate interior floor space, and constructed of wood or light gauge metal frame, brick veneer, prefabricated, or manufactured construction. Pre-engineered steel buildings must not exceed 50,000 square feet.

8Which entity administers the Georgia Business & Law Exam on behalf of the Georgia State Licensing Board for Residential and General Contractors?

A.Prometric

B.PSI Services LLC

C.Pearson VUE

D.The Georgia Secretary of State directly

Explanation: PSI Services LLC administers the Georgia Business & Law Exam on behalf of the Georgia State Licensing Board for Residential and General Contractors, which operates under the Georgia Secretary of State, Professional Licensing Boards Division. Candidates register through PSI, pay the $60 PSI exam fee, and receive their score on screen immediately after completing the computer-delivered exam.

9Under Georgia law, what is the criminal classification of contracting without a valid and current license when a license is required?

A.It is a civil infraction punishable only by a fine

B.It is a misdemeanor

C.It is a felony punishable by imprisonment for one to five years

D.It is not criminalized; the only consequence is contract unenforceability

Explanation: Under O.C.G.A. § 43-41-12, engaging in residential or general contracting without a valid and current license is a misdemeanor. On conviction the statute sets the punishment for each offense at a fine of not less than $500.00 or imprisonment of three months, or both, in the discretion of the court. The $2,500 threshold in O.C.G.A. § 43-41-2 determines when licensure is required in the first place.

10A contractor bids a $6,000 residential bathroom remodel and splits it into two separate contracts of $3,000 each to avoid Georgia's licensing threshold. Which statement is most accurate under Georgia law?

A.This is lawful because each individual contract is above $2,500 but below $5,000

B.This is lawful because the owner agreed to the split contracts in writing

C.This is unlicensed contracting because the total value of the work exceeds $2,500 and splitting contracts does not avoid the licensing requirement

D.This is lawful only if each phase is completed and paid for before the next contract is signed

Explanation: Georgia courts and the board look at the total value of the work or compensation, whichever is higher, to determine whether a license is required under O.C.G.A. § 43-41-2. Artificially splitting a single project into multiple sub-$2,500 contracts to evade the licensing threshold does not legalize unlicensed contracting. The $6,000 total project value triggers the licensure requirement regardless of how the paperwork is divided.

About the GA Business & Law Exam

The Georgia Business & Law Exam is the shared law and business paper required for licensure as a Residential or General Contractor in Georgia. It is a 50-question, 120-minute, open-book, four-option multiple-choice exam administered by PSI. Passing it once satisfies the Business & Law requirement for all other Georgia Residential and General Contractor licenses. Topics cover licensing requirements, estimating and bidding, business organization and financial management, tax laws, labor laws, project management and lien law, contracts, risk management, and environmental and safety.

Questions

50 scored questions

Time Limit

120 minutes

Passing Score

70% (35 correct)

Exam Fee

$60 (PSI Services LLC for the Georgia State Licensing Board for Residential and General Contractors)

GA Business & Law Exam Content Outline

10%

Licensing Requirements

Georgia contractor licensing statutes, license classifications, qualifications, and board rules

14%

Estimating and Bidding

Quantity takeoffs, overhead and profit, bid preparation, and bid errors

14%

Business Organization and Financial Management

Business structures, accounting, financial statements, and cash flow

10%

Tax Laws

Georgia sales and use tax on materials, payroll taxes, and income tax obligations

10%

Labor Laws

Employment law, workers' compensation, and employee classification

12%

Project Management and Lien Law

Scheduling, supervision, and Georgia mechanic's/materialman's lien rights and deadlines

12%

Contracts

Contract formation, change orders, claims, and dispute resolution

Risk Management

Insurance, bonds, and managing construction risk

10%

Environmental and Safety

Environmental compliance and OSHA jobsite safety responsibilities

How to Pass the GA Business & Law Exam

What You Need to Know

Passing score: 70% (35 correct)
Exam length: 50 questions
Time limit: 120 minutes
Exam fee: $60

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

GA Business & Law Study Tips from Top Performers

1Tab the Georgia-NASCLA Contractors Guide (3rd Edition) by content outline subject so you can navigate quickly under time pressure.

2Master Georgia mechanic's lien deadlines: file the claim of lien within 90 days of last furnishing, and enforce within 365 days of filing.

3Know the $2,500 unlicensed-work threshold and that contracts with unlicensed contractors are unenforceable after July 1, 2008 (O.C.G.A. 43-41-17).

4Practice estimating calculations: overhead and profit markup, retainage, and sales tax on materials.

5Remember the edition trap: the residential/general contractor path uses the 3rd edition guide, not the 5th edition used for HVAC/plumbing/electrical.

Frequently Asked Questions

What is the Georgia Business & Law Exam?

It is the 50-question, 120-minute, open-book multiple-choice exam administered by PSI for the Georgia State Licensing Board for Residential and General Contractors. A 70% score (35 correct) is required to pass.

Do I have to take the Business & Law Exam separately for each contractor license?

No. Once you pass the Georgia Business & Law Exam you have met the Business & Law requirement for all other Georgia Residential and General Contractor licenses; you only take the applicable trade exam for each additional classification.

What reference may I bring to the exam?

The sole approved open-book reference is the Georgia-NASCLA Contractors Guide to Business, Law and Project Management, Georgia State Licensing Board for Residential and General Contractors, 3rd Edition. References may be highlighted, underlined, and permanently tabbed, but not written in.

What happens if I fail the Business & Law Exam twice?

On your first exam approval you get 2 attempts within the 1-year eligibility period. If you fail either the Business & Law or the Trade exam twice, O.C.G.A. 43-41-6(g) requires you to wait at least 1 year before a third or subsequent attempt.

Is the $60 PSI exam fee the only cost?

No. The $60 PSI examination fee is separate from the Board's license application fee. You must first obtain Board approval and an Exam Approval Letter before scheduling with PSI.