PracticeStudy GuidesFlashcardsCheat SheetsGamesVideosRadioBlog
All Practice Exams

Free Practice Questions for TN Business and Law

Exam-style questions and explanations by OpenExamPrep.

✓ No registration✓ No credit card
100+ Questions
100% Free

Loading practice questions...

Same family resources

Explore More Tennessee Board for Licensing Contractors Examinations

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

Tennessee CMC Plumbing and HVAC Contractor Examination

Practice Questions100 questionsFeed

Tennessee Combined (BC) Contractor Examination

Practice Questions100 questionsFeed

Tennessee Commercial (BC-B) Contractor Examination

Practice Questions100 questionsFeed

Tennessee Commercial/Industrial (BC-B,C) Contractor Examination

Practice Questions100 questionsFeed

Tennessee Electrical (CE) Contractor Examination

Practice Questions100 questionsFeed

Tennessee Fire Sprinkler (CMC-D) Contractor Examination

Practice Questions100 questionsFeed
Exam Review

Key Facts: TN Business and Law Exam

50 Q

Official Exam Questions

Prov Tennessee portal, checked 2026-10-13

73%

Passing Score

Prov Tennessee portal, checked 2026-10-13

2.5 hr

Time Allowed

Prov Tennessee portal, checked 2026-10-13

USD 53

Prov Exam Fee

Prov Tennessee portal, checked 2026-10-13

Open Book

Book Policy

Prov Tennessee portal, checked 2026-10-13

Tennessee Contractor Business and Law is the Board’s open-book examination administered by Prov. The current portal lists 50 questions, 150 minutes, a 73% passing score, and a $53 fee, with NASCLA Tennessee fourth edition as its reference. Most initial contractor applicants take it through a qualifying agent; the approved BC-A/r course is an exception. Source check: October 13, 2026.

Sample TN Business and Law Practice Questions

Try these sample questions to review concepts for the TN Business and Law exam. 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

Tennessee Contractor Business and Law is the Board’s open-book examination administered by Prov. The current portal lists 50 questions, 150 minutes, a 73% passing score, and a $53 fee, with NASCLA Tennessee fourth edition as its reference. Most initial contractor applicants take it through a qualifying agent; the approved BC-A/r course is an exception. Source check: October 13, 2026.

Exam sponsor: Prov, Inc. (for the Tennessee Board for Licensing Contractors). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Open-book computer-based multiple-choice. Allowed reference: NASCLA Contractors Guide to Business, Law and Project Management — Tennessee, 4th Edition. Remote Examroom.ai testing is available.

Time Limit

2.5 hours

Passing Score

73%

Exam / Certification Fees

USD 53

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

8%

Business Organization

4 items covering sole proprietorships, partnerships, corporations, LLCs, joint ventures (Rule 0680-01-.11), qualifying agents, DBAs, and 90-day entity mode-of-operation changes.

10%

Licensing

5 items covering T.C.A. Title 62 Chapter 6 licensing thresholds ($25,000 general/MEP/roofing, $100,000 masonry), classifications, monetary limits, the July 1, 2026 50% Surety Bond option, renewals, and bid envelope rules.

14%

Estimating and Bidding

7 items covering quantity takeoffs, waste and swell factors, labor burden, equipment and overhead allocation, markup vs. gross margin math, bid bonds, addenda, and bidding ethics.

12%

Contracts

6 items covering contract elements, delivery and pricing structures, changes, delays, indemnification (T.C.A. § 62-6-123), breach remedies, and the Tennessee Prompt Pay Act (5% retainage cap, $500,000 escrow threshold, $300/day damages).

8%

Project Management

4 items covering Critical Path Method (CPM) scheduling, float calculations, schedule compression, Earned Value cost control, submittals, RFIs, quality control, and project closeout.

8%

Risk Management

4 items covering Commercial General Liability minimums ($100k/$500k/$1M), Builder's Risk, Tennessee Workers' Compensation and Exemption Registry rules, and Miller Act / Tennessee Little Miller Act surety bonds.

10%

OSHA Safety

5 items covering TOSHA/OSHA recordkeeping (Forms 300, 300A, 301), 8-hour/24-hour severe injury reporting, inspections, citations, 29 CFR 1926 fall protection (6 ft), scaffolds (10 ft), trenching/excavation (4 ft / 5 ft / 20 ft, TN 811), and HazCom.

6%

Financial Management

3 items covering cash vs. accrual accounting, Completed-Contract vs. Percentage-of-Completion revenue recognition, over/underbillings, financial ratios, working capital, cash flow, break-even, and depreciation.

10%

Labor Law

5 items covering FLSA minimum wage and overtime calculations, worker classification, Form I-9 rules, the Tennessee Lawful Employment Act (E-Verify at 35+ employees), Right-to-Work, FMLA/ADA/Title VII, and Davis-Bacon prevailing wage.

10%

Tax Law

5 items covering FICA, FUTA, Form 941 deposit schedules ($50,000 lookback, $100,000 next-day rule), Trust Fund Recovery Penalty, Form 1099-NEC, and Tennessee sales/use, business ($100,000 threshold), SUTA ($7,000 wage base), and franchise/excise taxes.

4%

Lien Law

2 items covering T.C.A. Title 66 Chapter 11 Prime vs. Remote Contractor lien rights, 1-4 residential unit rules, commercial Notice of Nonpayment (90 days from month-end), 90-day Notice of Lien recording, enforcement, and lien release bonds.

Preparing for the TN Business and Law Exam

What You Need to Know

  • Passing score: 73%
  • Assessment: Open-book computer-based multiple-choice. Allowed reference: NASCLA Contractors Guide to Business, Law and Project Management — Tennessee, 4th Edition. Remote Examroom.ai testing is available.
  • Time limit: 2.5 hours
  • Exam / certification fees: USD 53 Official sources

Using Our Practice Resources

  • 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: Suggested Study Strategy

1Distribute study time across all 11 official Prov subject areas (current Prov portal, checked 2026-10-13), prioritizing Estimating and Bidding (14%), Contracts (12%), Licensing (10%), OSHA Safety (10%), Labor Law (10%), and Tax Law (10%).
2Prepare your NASCLA Tennessee 4th Edition manual with permanent self-adhesive tabs before test day; moveable Post-it flags and handwritten margin notes will bar the book from the testing room.
3Memorize key Tennessee statutory numbers: $25,000 prime/MEP/roofing threshold ($100,000 masonry), 10x lesser of working capital or net worth, 50% Contractor's Surety Bond option, 5% retainage cap, $500,000 escrow threshold, $300/day escrow damages, and 90-day lien/nonpayment deadlines.
4Check the effective Prov bulletin before scheduling. The October 14, 2026 edition says restroom breaks keep the clock running and lock questions viewed before leaving; prepare your timing accordingly.

Frequently Asked Questions

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

Prov’s current Tennessee exam portal lists 50 questions, 150 minutes, a 73% passing score, and a $53 exam fee for Business and Law. The listed reference is the NASCLA Tennessee fourth edition (2024). These logistics were checked October 13, 2026; use the effective bulletin and appointment confirmation for scheduling and remote-test conditions.

How much does the Tennessee Business and Law exam cost?

Prov charges $53 per examination attempt, including retakes. After passing the required exam(s), applicants pay a separate $250 initial contractor license application fee to the Tennessee Board for Licensing Contractors at core.tn.gov, and $200 every two years for renewal.

Is the Tennessee Business and Law exam open book, and how may I tab my reference?

Yes. The exam is open book using the NASCLA Contractors Guide to Business, Law and Project Management — Tennessee, 4th Edition. Permanent gummed, self-adhesive, or insertable 3-ring divider tabs and pen highlighting are permitted, but moveable Post-it notes, handwritten notes, added sheets, and writing in the book during the exam are strictly prohibited.

Who must take the Tennessee Business and Law exam, and do I need Board pre-approval?

Most new contractor-license applicants designate a qualifying agent who passes Business and Law. The approved BC-A/r restricted residential course substitutes for both Business and Law and the residential trade exam. Business and Law does not require Board preapproval; CMC and CMC-A trade exams do. Different qualified individuals may take the business and trade exams for a company.

How does the Tennessee Board calculate a contractor's monetary limit, and what is the 2026 Surety Bond option?

The basic Board formula is ten times the lesser of eligible working capital and net worth, subject to experience and Board approval. Initial limits up to $3 million use at least a CPA review; above $3 million use an audit, and unlimited financial qualification generally requires $300,000 in both measures. Since July 1, 2026, an accepted continuous licensing surety bond of at least 50% of the requested limit can replace CPA financial proof; the unlimited bond is $1.5 million. Renewal financial tiers and supplemental instruments have different rules.