2
Business Management and Law for Commercial Contractors EXAM
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REVIEW questions with accurate detailed solutions
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Ch.2 What is a sole proprietorship? - ✔✔business owned and operated by one person
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Ch.2 S Corporations- definition and requirements - ✔✔passes its items of income, loss,
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deduction, and credits through to its shareholders to be included on their separate returns.
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-Domestic corp. with one class of stock || || || || || ||
-no more than 100 shareholders who are citizens or legal residents of the U.S.
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-all Shareholders must consent to S corp. status
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-use of a permitted tax year
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-filing of IRS Form 2553
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Ch.2 LLC - ✔✔Limited liabilitycompany, not taxed, flexibility
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Ch.2 Joint venture - ✔✔an agreement between two or more companies to share a business
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project
Ch.3 when is a contractors license needed? - ✔✔any job over $5,000
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ch.4 What is Insurance? - ✔✔a protective measure in which coverage is obtained for a
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specific risk through a contract
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ch.4 what is property insurance? - ✔✔Provides payment to the insured person if his or her
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property is damaged or destroyed by an accident covered by the insurance policy.
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, 2
ch.4 what is All-Risk Builders' Risk Insurance? - ✔✔covers machinary, equipment, materials
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etc. that are part of or will be part of the structure. (your tools are not included)
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ch.4 What is Inland Marine/Equipment theft insurance? - ✔✔covers your tools and
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equipment.
ch.4 what is Liability insurance? - ✔✔designed to protect against third-party claims that
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arise from alleged negligence resulting in bodily injury or property damage.
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ch.4 what is Commercial General Liability (CGL) - ✔✔offers basic liability coverage for four
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types of injuries-|| ||
-physical bodily injury || ||
-damage or loss to property not belonged by bus.
|| || || || || || || ||
-reputation damage/ slander || ||
-advertising injury ||
ch.4 insurance coverage for subcontractors - ✔✔verify subcontractors insurance and put it
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in your contracts to protect you from liabilty from any losses or damages incurred by the
|| || || || || || || || || || || || || || || ||
subcontractor
Ch.4 what is bond language and what are the four basic requirements? - ✔✔bonds contain
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four basic reuirements:
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-total dollar amount required for the bond
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-length of the bond || || ||
-requirements for notice of defect or lack of maintenance
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-bond enforcement? ||
Business Management and Law for Commercial Contractors EXAM
|| || || || || || || ||
REVIEW questions with accurate detailed solutions
|| || || || ||
Ch.2 What is a sole proprietorship? - ✔✔business owned and operated by one person
|| || || || || || || || || || || || ||
Ch.2 S Corporations- definition and requirements - ✔✔passes its items of income, loss,
|| || || || || || || || || || || || ||
deduction, and credits through to its shareholders to be included on their separate returns.
|| || || || || || || || || || || || ||
-Domestic corp. with one class of stock || || || || || ||
-no more than 100 shareholders who are citizens or legal residents of the U.S.
|| || || || || || || || || || || || ||
-all Shareholders must consent to S corp. status
|| || || || || || ||
-use of a permitted tax year
|| || || || ||
-filing of IRS Form 2553
|| || || ||
Ch.2 LLC - ✔✔Limited liabilitycompany, not taxed, flexibility
|| || || || || || ||
Ch.2 Joint venture - ✔✔an agreement between two or more companies to share a business
|| || || || || || || || || || || || || || ||
project
Ch.3 when is a contractors license needed? - ✔✔any job over $5,000
|| || || || || || || || || || ||
ch.4 What is Insurance? - ✔✔a protective measure in which coverage is obtained for a
|| || || || || || || || || || || || || || ||
specific risk through a contract
|| || || ||
ch.4 what is property insurance? - ✔✔Provides payment to the insured person if his or her
|| || || || || || || || || || || || || || || ||
property is damaged or destroyed by an accident covered by the insurance policy.
|| || || || || || || || || || || ||
, 2
ch.4 what is All-Risk Builders' Risk Insurance? - ✔✔covers machinary, equipment, materials
|| || || || || || || || || || || ||
etc. that are part of or will be part of the structure. (your tools are not included)
|| || || || || || || || || || || || || || || ||
ch.4 What is Inland Marine/Equipment theft insurance? - ✔✔covers your tools and
|| || || || || || || || || || || ||
equipment.
ch.4 what is Liability insurance? - ✔✔designed to protect against third-party claims that
|| || || || || || || || || || || || ||
arise from alleged negligence resulting in bodily injury or property damage.
|| || || || || || || || || ||
ch.4 what is Commercial General Liability (CGL) - ✔✔offers basic liability coverage for four
|| || || || || || || || || || || || || ||
types of injuries-|| ||
-physical bodily injury || ||
-damage or loss to property not belonged by bus.
|| || || || || || || ||
-reputation damage/ slander || ||
-advertising injury ||
ch.4 insurance coverage for subcontractors - ✔✔verify subcontractors insurance and put it
|| || || || || || || || || || || ||
in your contracts to protect you from liabilty from any losses or damages incurred by the
|| || || || || || || || || || || || || || || ||
subcontractor
Ch.4 what is bond language and what are the four basic requirements? - ✔✔bonds contain
|| || || || || || || || || || || || || || ||
four basic reuirements:
|| ||
-total dollar amount required for the bond
|| || || || || ||
-length of the bond || || ||
-requirements for notice of defect or lack of maintenance
|| || || || || || || ||
-bond enforcement? ||
