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100+ Free SC Law and Business Management Practice Questions

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2026 Statistics

Key Facts: SC Law and Business Management Exam

50 Q

Official Exam Questions

PSI SC Commercial Contractor CIB updated 5/15/2025

70%

Passing Score (35 of 50)

PSI SC Commercial Contractor CIB updated 5/15/2025

125 min

Time Allowed

PSI SC Commercial Contractor CIB updated 5/15/2025

USD 75

PSI Exam Fee

PSI SC Commercial Contractor CIB updated 5/15/2025

Open Book

Book Policy

PSI SC Commercial Contractor CIB updated 5/15/2025

South Carolina Business Management and Law for Commercial Contractor is the official CLB/PSI open-book exam: 50 questions, 70% (35 of 50), 125 minutes, USD 75 (bulletin updated 5/15/2025). Official delivery is English.

Sample SC Law and Business Management Practice Questions

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

1Under S.C. Code § 40-11-30, a South Carolina general or mechanical contractor license is required when the total cost of construction exceeds which amount?
A.USD 5,000
B.USD 10,000
C.USD 25,000
D.USD 50,000
Explanation: S.C. Code § 40-11-30 bars practicing as a contractor by performing or offering work when the total cost of construction is greater than USD 10,000 for general contracting or greater than USD 10,000 for mechanical contracting without a license. The 2023 amendment raised the former USD 5,000 trigger to USD 10,000. Total cost of construction includes labor, material, equipment, profit, and incidental expenses for the entire project.
2S.C. Code § 40-11-20 defines working capital as which calculation?
A.Total assets minus total liabilities
B.Current assets minus current liabilities
C.Gross revenue minus cost of goods sold
D.Cash plus accounts receivable only
Explanation: S.C. Code § 40-11-20(28) defines working capital as the capital of a business calculated as current assets minus current liabilities. The Contractor's Licensing Board uses that figure, or net worth, to place a firm in a license group under § 40-11-260. Net worth is a different statutory term: total wealth taking account of all financial assets and liabilities.
3A South Carolina general contractor wants Group Two. Which set matches S.C. Code § 40-11-260 and the LLR group table?
A.Bids and jobs not to exceed USD 100,000; working capital USD 10,000 or net worth USD 20,000; surety bond USD 20,000
B.Bids and jobs not to exceed USD 400,000; working capital USD 40,000 or net worth USD 60,000; surety bond USD 60,000
C.Bids and jobs not to exceed USD 1,000,000; working capital USD 100,000 or net worth USD 150,000; surety bond USD 150,000
D.Bids and jobs not to exceed USD 3,000,000; working capital USD 175,000 or net worth USD 250,000; surety bond USD 250,000
Explanation: Section 40-11-260(A)(2) sets general-contractor Group Two at bids and jobs not to exceed USD 400,000, with required net worth of USD 60,000 or working capital of USD 40,000. Section 40-11-262 lets an applicant post a surety bond in the same amount as the group's net worth (USD 60,000) instead of a financial statement. The applicant must meet the working-capital figure or the net-worth figure, not both.
4Under S.C. Code § 40-11-230(C), when may one individual serve as primary qualifying party for two licensed entities?
A.Whenever both entities hold the same license classification
B.Only if both entities operate from the same physical location, the individual is involved daily in both, derives a livelihood from both, and has ownership in both with at least 50 percent ownership in one
C.If the individual holds two separate qualifying-party certificates
D.Never; a qualifying party may serve only one licensee
Explanation: Section 40-11-230(A) generally allows an individual to serve as qualifying party for only one licensee. Subsection (C) creates a narrow exception: both entities must engage in business from the same physical location, and the qualifying party must be involved in both daily, derive a livelihood from both, and have ownership in both with at least 50 percent ownership in one. The primary qualifying party must also remain in a responsible management position and may not take conflicting outside employment.
5In a commercial quantity takeoff, what is the estimator's first task?
A.Apply the company's target profit percentage to last year's bid
B.Measure and list the work quantities shown on the plans and specifications
C.Average the last three successful bids for similar buildings
D.Ask each subcontractor to name a lump-sum price with no quantities
Explanation: A quantity takeoff is the systematic measurement of labor, material, and equipment quantities from the contract documents. Accurate quantities are the base for unit prices, waste, labor-hours, and the bid recap. Skipping the takeoff and scaling an old bid or a competitor's number hides scope gaps and produces an unreliable price.
6During bidding, the owner issues an addendum that changes a specified product. How should a bidder treat that addendum?
A.Ignore it unless the change exceeds 10 percent of the bid
B.Incorporate it into the bid and acknowledge it as the invitation requires
C.Price the original product and negotiate the change after award
D.Use it only if the bidder's preferred vendor stocks the new product
Explanation: An addendum amends the bidding documents before bid opening. A responsive bid prices the documents as amended and acknowledges every addendum the invitation requires. Bidding the unamended set is a responsiveness defect and can get the bid rejected. After award the same change would be a change order, not an addendum.
7On a public commercial bid, what is the difference between a responsive bid and a responsible bidder?
A.Responsive means the bid follows the invitation; responsible means the bidder can perform
B.Responsive means the bidder has a license; responsible means the bid is the lowest number
C.The two terms are interchangeable under South Carolina bidding practice
D.Responsive means the bid bond is 10 percent; responsible means it is 5 percent
Explanation: A responsive bid complies with the material terms of the invitation — forms, acknowledgments, bonds, and pricing structure. A responsible bidder has the license, finances, experience, and capacity to complete the work. Public owners evaluate responsiveness of the bid and responsibility of the bidder as separate tests. The low number is not enough if the bid is nonresponsive or the firm is not responsible.
8After bids are opened, a prime contractor discloses a subcontractor's quoted price to a competitor to obtain a lower number. What is that practice called?
A.Value engineering
B.Bid shopping
C.Bid peddling by the prime
D.A required public-bid leveling step
Explanation: Bid shopping is using one subcontractor's bid to pressure another after the prime has the job or after quotes are in. It is widely treated as unethical, damages supplier trust, and can produce a low-quality buyout. Bid peddling is the opposite move: a sub approaching the prime after opening to undercut the listed sub. Value engineering is a later, documented cost-saving proposal, not leaking a competitor's price.
9Which cost is a direct job cost rather than company overhead?
A.The home-office bookkeeper's salary
B.General liability insurance allocated to the company as a whole
C.Carpenters' wages and the framing lumber installed on this project
D.The annual CPA fee to compile the company financial statement
Explanation: Direct costs are labor, material, equipment, and subcontract dollars charged to a specific project. Home-office salaries, company-wide insurance, and the annual accounting fee are indirect overhead that must be recovered through a markup, not as a line item unique to one job. Mixing the two understates true job cost or double-counts overhead.
10Why does a commercial estimate include a contingency line?
A.To replace the need for a quantity takeoff
B.To cover known-unknowns that are not yet detailed but are reasonably expected
C.To hide profit from the owner on a lump-sum bid
D.To meet the South Carolina license-group net-worth test
Explanation: Contingency is a priced allowance for risk that is expected but not fully quantified — design gaps, weather, market swings, or coordination items. It is not a substitute for measuring known scope, and it is not the profit line. License-group finances are a separate statutory test under § 40-11-260.

About the SC Law and Business Management Exam

The South Carolina Business Management and Law for Commercial Contractor Examination is the official CLB law-and-project-management examination administered by PSI. The official exam has 50 scored questions. Passing is 70% (35 of 50) in 125 minutes. The examination is open book. PSI lists USD 75 (Candidate Information Bulletin updated 5/15/2025). All commercial general and mechanical contractor candidates must pass this examination in addition to any required technical classification examination. Burglar and fire alarm candidates take the Alarm Code of Laws Examination instead. LLR charges a separate USD 350 license application fee. This bank is an English-language MCQ study adaptation. It does not replace required trade experience, board approval, financial statements or bonds, or the official examination.

Assessment

Open-book computer-based multiple-choice. Allowed reference: NASCLA Contractors Guide to Business, Law and Project Management — South Carolina Commercial Contractors, 9th Edition.

Time Limit

125 minutes

Passing Score

70% (35 of 50)

Exam Fee

USD 75 (PSI Services LLC (for the South Carolina Contractor's Licensing Board))

SC Law and Business Management Exam Content Outline

4%

Business Management

Business Management (2 items)

20%

Estimating and Bidding

Estimating and Bidding (10 items)

24%

Contracts and Agreements

Contracts and Agreements (12 items)

10%

Project Management

Project Management (5 items)

4%

Insurance and Bonding

Insurance and Bonding (2 items)

2%

Safety Recordkeeping

Safety Recordkeeping and Reporting (1 item)

6%

Labor Laws

Labor Laws and Employment Regulations (3 items)

14%

Financial Management

Financial Management (7 items)

6%

Tax Laws

Tax Laws (3 items)

6%

Liens

Liens (3 items)

4%

Environmental Laws

Environmental Laws and Regulations (2 items)

How to Pass the SC Law and Business Management Exam

What You Need to Know

  • Passing score: 70% (35 of 50)
  • Assessment: Open-book computer-based multiple-choice. Allowed reference: NASCLA Contractors Guide to Business, Law and Project Management — South Carolina Commercial Contractors, 9th Edition.
  • Time limit: 125 minutes
  • Exam fee: USD 75

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

SC Law and Business Management Study Tips from Top Performers

1Distribute study time to the official PSI content outline (bulletin updated 5/15/2025)
2Use the NASCLA South Carolina Commercial Contractors guide listed in the bulletin
3Temporary tabs such as Post-it notes are prohibited in the PSI center
4This bank is an English-language MCQ study aid, not an official PSI form

Frequently Asked Questions

How many questions are on the South Carolina Business Management and Law for Commercial Contractor Examination?

The official PSI examination has 50 scored questions. Passing is 70% (35 of 50) within 125 minutes (Commercial Contractor Candidate Information Bulletin updated 5/15/2025).

How much does the SC commercial contractor law exam cost?

PSI lists USD 75 for this examination. The South Carolina Contractor's Licensing Board charges a separate USD 350 license application fee.

Is the SC commercial contractor law exam open book?

Yes. PSI lists the commercial contractor examinations as open book. The listed reference is the NASCLA Contractors Guide to Business, Law and Project Management — South Carolina Commercial Contractors, 9th Edition.

Do alarm contractors take this examination?

No. Burglar alarm and fire alarm candidates take the Alarm Code of Laws Examination plus the matching technical alarm examination instead of this commercial contractor law examination.