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100+ Free TN Business and Law Practice Questions

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2026 Statistics

Key Facts: TN Business and Law Exam

50 Q

Official Exam Questions

Prov TN Contractor CIB 2026.07.13

73%

Passing Score

Prov TN Contractor CIB 2026.07.13

2.5 hr

Time Allowed

Prov TN Contractor CIB 2026.07.13

USD 53

Prov Exam Fee

Prov TN Contractor CIB 2026.07.13

Open Book

Book Policy

Prov TN Contractor CIB 2026.07.13

Tennessee Contractor Business and Law is the official Board/Prov open-book exam: 50 questions, 73%, 2.5 hours, USD 53 (bulletin dated 2026.07.13). Official delivery is English.

Sample TN Business and Law Practice Questions

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

1A Tennessee contractor operates as a sole proprietorship with no separate legal entity. Which statement best describes the owner's personal liability for business debts and job-site claims?
A.The owner is liable only up to the contractor license monetary limit
B.The owner has unlimited personal liability for the business's debts and obligations
C.Personal assets are automatically shielded once a Board license is issued
D.Liability is limited to the amount of the general liability policy deductible
Explanation: A sole proprietorship is not a separate legal person from the owner. Creditors and claimants may reach the owner's personal assets for business debts, judgments, and uninsured obligations. Forming an LLC or corporation, and keeping that entity in good standing, is the usual way to obtain limited liability.
2Which governing document typically sets internal ownership, voting, and management rules for a Tennessee limited liability company?
A.Corporate bylaws filed with the Tennessee Secretary of State
B.An operating agreement among the members
C.The Contractor's Affidavit submitted to the Board
D.A NASCLA project manual
Explanation: An LLC is formed by filing articles of organization, but day-to-day ownership and management rules live in the operating agreement. Bylaws are the internal rules of a corporation, not an LLC. The Board affidavit and NASCLA materials do not organize the company.
3Why do many small Tennessee contractors elect S corporation or LLC tax treatment instead of remaining a C corporation?
A.C corporations are prohibited from holding a Board contractor license
B.A C corporation's profits are generally taxed at the entity level and again when distributed as dividends
C.Only C corporations must obtain a federal employer identification number
D.S corporations and LLCs are exempt from Tennessee business tax
Explanation: A C corporation pays entity-level income tax, and shareholders pay tax again on dividends. That double tax is why pass-through forms (S corporation or LLC taxed as a partnership or disregarded entity) are common for closely held contractors. Entity choice does not, by itself, waive Board or business-tax duties.
4Under Rule 0680-01-.02, who may serve as the qualifying agent for a Tennessee corporation seeking a contractor license?
A.Any shareholder, regardless of ownership percentage, without further paperwork
B.Only the corporation's outside attorney
C.A major stockholder owning at least 20 percent of the stock, or a full-time employee with written power of attorney to bind the corporation
D.Any part-time bookkeeper who has sat for the Business and Law exam
Explanation: Rule 0680-01-.02(4)(c) allows a major stockholder (at least 20 percent) or a full-time employee with written power of attorney to serve as qualifying agent, provided that person has sufficient knowledge of the licensed construction work. A non-owner qualifying agent also triggers an interview appearance by an owner or officer with ownership or power of attorney.
5A Tennessee LLC's qualifying agent resigns. Under Rule 0680-01-.02, what must the company do?
A.Notify the Board within 10 days and appoint a new qualifying agent who takes the examination within 3 months, or the license becomes inactive
B.Continue bidding for 12 months under the departed agent's exam scores
C.File only an amended Secretary of State annual report; no Board notice is required
D.Automatically convert to a sole proprietorship license in the remaining member's name
Explanation: Rule 0680-01-.02(4)(e) requires Board notice within 10 days of a qualifying agent's death, resignation, termination, or incapacity. A replacement must take the examination and be appointed within 3 months or the license becomes inactive. Exam scores do not stay parked on a person who has left the firm.
6A licensed Tennessee partnership incorporates. Under Rule 0680-01-.09, how long does the entity have to apply for the new mode of operation, and what work may it perform in the meantime?
A.30 days, and it may immediately bid new work in the corporate name
B.90 days to apply; it may finish existing contracts if the application is timely, but it may not bid or enter new contracts until a new or revised license is issued
C.One year, with no restriction on new bidding
D.No application is required if the same qualifying agent stays in place
Explanation: Changing from a partnership to a corporation is a change in mode of operation. Rule 0680-01-.09 gives 90 days to apply. Existing contracts may continue if the application is made within that window, but the entity may not bid or enter new contracts until the Board issues a new or revised license.
7A Tennessee contractor wants to do business as "Ridgeline Builders" rather than the legal LLC name on the Board license. Which statement is correct?
A.The contractor may bid under any trade name so long as invoices use the legal name
B.The full DBA must appear on the Secretary of State certificate and on Board application forms, and the contractor must contract in the licensed name
C.A DBA automatically transfers the Board license to the trade name
D.Only residential BC-A contractors may use a DBA
Explanation: The Board requires the full DBA on the Secretary of State certificate and on application papers. Rule 0680-01-.25 then requires the licensee to contract in the name in which it is licensed. Bidding or contracting under an unlicensed name is a disciplinary violation.
8Two Tennessee licensees want to bid a USD 2,400,000 plant as a joint venture. Licensee A has a BC-C limit of USD 1,500,000 and Licensee B has a CMC limit of USD 1,200,000. Under Rule 0680-01-.11, when is the joint venture allowed?
A.Never, because joint ventures are prohibited in Tennessee
B.Only if each firm is licensed in a classification that is a necessary part of the project and that firm's monetary limit is at least as large as its portion of the work
C.Whenever the two monetary limits added together exceed the total project price, even if one firm is unlicensed in the needed trade
D.Only if both firms hold unlimited licenses
Explanation: Rule 0680-01-.11 lets licensed contractors combine monetary limitations through a joint venture. Each participant must be licensed in a classification that is a necessary and integral part of the project, and that classification's limit must cover that participant's portion. Adding numbers on paper does not excuse a missing classification. Those two conditions are the whole test in Rule 0680-01-.11; the rule does not require either firm to hold an unlimited license.
9In Tennessee, a prime contractor generally must hold a Board contractor license before bidding, offering to engage, or negotiating a price when the project cost is:
A.USD 10,000 or more
B.USD 25,000 or more, including labor and materials
C.USD 50,000 or more, labor only
D.USD 100,000 or more
Explanation: Tenn. Code Ann. § 62-6-102(4)(A) defines a contractor by reference to an undertaking "for which the total cost is twenty-five thousand dollars ($25,000) or more," and § 62-6-103 then makes it unlawful to engage or offer to engage in that contracting without a license. Bidding and negotiating a price are both covered. The threshold is the total project cost, including labor and materials, not labor alone.
10A masonry subcontractor will furnish labor and materials directly to a Tennessee prime contractor. When must that mason hold a Board license?
A.When the masonry portion is USD 25,000 or more
B.When the masonry portion is USD 100,000 or more
C.Only when the overall prime contract exceeds USD 1,000,000
D.Never, because only primes are licensed in Tennessee
Explanation: Rule 0680-01-.24(1) requires a subcontractor to be licensed to perform electrical, plumbing, heating, ventilation, air conditioning, and roofing work when that portion is USD 25,000 or more, and masonry work when the masonry portion is USD 100,000 or more, including materials and labor. The masonry figure comes from the same Tenn. Code Ann. § 62-6-102 definition that sets the USD 25,000 trigger for the other named trades.

About the TN Business and Law Exam

The Tennessee Contractor Business and Law Examination is the official Board examination administered by Prov beginning July 1, 2026. The official exam has 50 questions. Passing is 73% in 2.5 hours. The examination is open book. Prov lists USD 53 per attempt (Tennessee Contractor Candidate Information Bulletin dated 2026.07.13). Every new contractor applicant must pass this examination. A trade examination is also required for certain classifications. The Board charges a separate USD 250 initial 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 — Tennessee, 4th Edition. Remote Examroom testing is available.

Time Limit

2.5 hours

Passing Score

73% (37 of 50)

Exam Fee

USD 53 (Prov, Inc. (for the Tennessee Board for Licensing Contractors))

TN Business and Law Exam Content Outline

8%

Business Organization

Business Organization (4 items)

10%

Licensing

Licensing (5 items)

14%

Estimating and Bidding

Estimating and Bidding (7 items)

12%

Contracts

Contracts (6 items)

8%

Project Management

Project Management (4 items)

8%

Risk Management

Risk Management (4 items)

10%

OSHA Safety

OSHA Safety (5 items)

6%

Financial Management

Financial Management (3 items)

10%

Labor Law

Labor Law (5 items)

10%

Tax Law

Tax Law (5 items)

4%

Lien Law

Lien Law (2 items)

How to Pass the TN Business and Law Exam

What You Need to Know

  • Passing score: 73% (37 of 50)
  • Assessment: Open-book computer-based multiple-choice. Allowed reference: NASCLA Contractors Guide to Business, Law and Project Management — Tennessee, 4th Edition. Remote Examroom testing is available.
  • Time limit: 2.5 hours
  • Exam fee: USD 53

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

TN Business and Law Study Tips from Top Performers

1Distribute study time to the official Prov content outline (bulletin dated 2026.07.13)
2Use the NASCLA Tennessee 4th Edition guide listed in the bulletin
3Moveable tabs and Post-it notes are prohibited in the Prov center
4This bank is an English-language MCQ study aid, not an official Prov form

Frequently Asked Questions

How many questions are on the Tennessee Contractor Business and Law Examination?

The official Prov examination has 50 questions. Passing is 73% within 2.5 hours (Tennessee Contractor Candidate Information Bulletin dated 2026.07.13).

How much does the Tennessee Business and Law exam cost?

Prov lists USD 53 per attempt, including retakes. The Tennessee Board for Licensing Contractors charges a separate USD 250 initial contractor application fee.

Is the Tennessee Business and Law exam open book?

Yes. Prov delivers Tennessee contractor examinations in an open-book format. The listed reference is the NASCLA Contractors Guide to Business, Law and Project Management — Tennessee, 4th Edition.

Who must take the Tennessee Business and Law exam?

Every new contractor license applicant must pass Business and Law. The same person is not required to take any required trade examination, and up to two people may take each examination for the company.