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NORTH CAROLINA LIMITED CONTRACTOR EXAMCOMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE THIS
YEAR-JUST RELEASED
SUMMURIZED POINT-FORM ACTUAL EXAM COVERAGE
• Licensing (NCGS 87): License required for projects ≥ $30,000. 3 limitations: Limited ($500k),
Intermediate ($1M), Unlimited. 5 classifications: Building, Residential, Highway, Public Utilities,
Specialty. Financial requirements: Limited = $17k working capital / $80k net worth / $175k
bond; Intermediate = $75k working capital / $500k bond; Unlimited = $150k working capital /
$1M bond. Qualifier must pass exam; notify Board within 10 days if qualifier leaves; license
invalid after 90 days without replacement.
• Contract Law: Offer, acceptance, consideration, mutual assent, capacity, legal purpose.
Standard forms, change orders, breach, warranties, dispute resolution (arbitration, mediation,
litigation).
• Project Management: WBS, CPM scheduling, Gantt charts, resource allocation, cost estimating
(direct/indirect costs), EVM (PV, AC, EV, CPI, SPI). Change order procedures.
• Financial Management: Cash vs. accrual accounting. Financial statements (balance sheet,
income statement, cash flow). Working capital = current assets – current liabilities. Job costing.
Retention (10%).
• Lien Law (NCGS 44A): File claim of lien ≤ 120 days after last furnishing. Enforce lien ≤ 180 days
after last furnishing. Lien agent required for projects ≥ $30,000 (except owner-occupied
residential). Notice to lien agent within 15 days of first furnishing.
• Insurance, Bonding & Risk Management: General liability, builder's risk, workers' comp (≥3
employees). Statutory employer – subcontractor must provide certificate. Surety bonds: bid
(5%), performance, payment (100%). Indemnity agreements.
• Safety (OSHA 1926): Fall protection ≥6 ft. Scaffold guardrails at 10 ft. Trench protective system
≥5 ft. Competent person requirements. PPE. Hazard communication (SDS, labeling). NC OSH
state plan.
• Environmental (NCGS 113A-57): Erosion control plan required for disturbance >1 acre; file ≥30
days before starting. 25-ft buffer for trout waters. Stabilize slopes within 21 days. Sediment
retention on tract.
• Business Organizations: Sole proprietorship, partnership, corporation, LLC, LLP. Registration
with NC Secretary of State. Liability and taxation differences.
NORTH CAROLINA LIMITED CONTRACTOR EXAM
Question 1
A general contractor in Raleigh is bidding on a project to construct a new office building. The total
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contract value is $35,000, excluding the cost of land. Under North Carolina General Statutes, which of
the following is true regarding the contractor's licensure requirement?
A) A license is not required because the project value is below $40,000.
B) A license is required because the project value is $30,000 or more.
C) A license is required only if the contractor is bidding on a public project.
D) A license is not required because the contractor is working on commercial property.
Answer: B
Rationale: N.C. Gen. Stat. § 87-1 requires a general contractor license for any project where the cost of
the undertaking is $30,000 or more. This threshold applies regardless of whether the project is
residential or commercial, public or private.
Question 2
A contractor is applying for a Limited License. What are the financial requirements that must be satisfied
under 21 NCAC 12A .0204?
A) Current assets exceeding current liabilities by at least $75,000
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B) Current assets exceeding current liabilities by at least $150,000
C) Current assets exceeding current liabilities by at least $17,000, or a total net worth of at least
$80,000, or a $175,000 surety bond
D) Current assets exceeding current liabilities by at least $17,000, or a total net worth of at least $80,000
Answer: C
Rationale: For a Limited License, the applicant must have either: (1) working capital of $17,000 (current
assets minus current liabilities), (2) net worth of $80,000, or (3) a $175,000 surety bond.
Question 3
A builder is constructing a multi-unit residential building with 10 condominium units, each valued at
$15,000. The total project cost, excluding land, is $150,000. Is the general contractor required to have a
license?
A) No, because each individual unit is valued below $30,000.
B) Yes, because for multi-unit buildings with three or more units, all units in the building are aggregated
to determine the $30,000 threshold.
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C) No, because the project is residential and an exemption applies.
D) Yes, only if the contractor is performing the work as a subcontractor.
Answer: B
Rationale: 21 NCAC 12 .0211 provides that for projects consisting of three or more units within each
building (including apartments, condominiums, and townhomes), all units in the building are considered
in determining the cost of the undertaking under G.S. 87-1. Since $150,000 exceeds $30,000, a license is
required.
Question 4
A contractor has held a North Carolina contractor license for three years with a designated qualifier. The
qualifier suddenly resigns. Within how many days must the contractor notify the Board of this change?
A) 5 days
B) 10 days
C) 30 days
D) 90 days
NORTH CAROLINA LIMITED CONTRACTOR EXAMCOMPLETE
QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE THIS
YEAR-JUST RELEASED
SUMMURIZED POINT-FORM ACTUAL EXAM COVERAGE
• Licensing (NCGS 87): License required for projects ≥ $30,000. 3 limitations: Limited ($500k),
Intermediate ($1M), Unlimited. 5 classifications: Building, Residential, Highway, Public Utilities,
Specialty. Financial requirements: Limited = $17k working capital / $80k net worth / $175k
bond; Intermediate = $75k working capital / $500k bond; Unlimited = $150k working capital /
$1M bond. Qualifier must pass exam; notify Board within 10 days if qualifier leaves; license
invalid after 90 days without replacement.
• Contract Law: Offer, acceptance, consideration, mutual assent, capacity, legal purpose.
Standard forms, change orders, breach, warranties, dispute resolution (arbitration, mediation,
litigation).
• Project Management: WBS, CPM scheduling, Gantt charts, resource allocation, cost estimating
(direct/indirect costs), EVM (PV, AC, EV, CPI, SPI). Change order procedures.
• Financial Management: Cash vs. accrual accounting. Financial statements (balance sheet,
income statement, cash flow). Working capital = current assets – current liabilities. Job costing.
Retention (10%).
• Lien Law (NCGS 44A): File claim of lien ≤ 120 days after last furnishing. Enforce lien ≤ 180 days
after last furnishing. Lien agent required for projects ≥ $30,000 (except owner-occupied
residential). Notice to lien agent within 15 days of first furnishing.
• Insurance, Bonding & Risk Management: General liability, builder's risk, workers' comp (≥3
employees). Statutory employer – subcontractor must provide certificate. Surety bonds: bid
(5%), performance, payment (100%). Indemnity agreements.
• Safety (OSHA 1926): Fall protection ≥6 ft. Scaffold guardrails at 10 ft. Trench protective system
≥5 ft. Competent person requirements. PPE. Hazard communication (SDS, labeling). NC OSH
state plan.
• Environmental (NCGS 113A-57): Erosion control plan required for disturbance >1 acre; file ≥30
days before starting. 25-ft buffer for trout waters. Stabilize slopes within 21 days. Sediment
retention on tract.
• Business Organizations: Sole proprietorship, partnership, corporation, LLC, LLP. Registration
with NC Secretary of State. Liability and taxation differences.
NORTH CAROLINA LIMITED CONTRACTOR EXAM
Question 1
A general contractor in Raleigh is bidding on a project to construct a new office building. The total
, Page 2 of 210
contract value is $35,000, excluding the cost of land. Under North Carolina General Statutes, which of
the following is true regarding the contractor's licensure requirement?
A) A license is not required because the project value is below $40,000.
B) A license is required because the project value is $30,000 or more.
C) A license is required only if the contractor is bidding on a public project.
D) A license is not required because the contractor is working on commercial property.
Answer: B
Rationale: N.C. Gen. Stat. § 87-1 requires a general contractor license for any project where the cost of
the undertaking is $30,000 or more. This threshold applies regardless of whether the project is
residential or commercial, public or private.
Question 2
A contractor is applying for a Limited License. What are the financial requirements that must be satisfied
under 21 NCAC 12A .0204?
A) Current assets exceeding current liabilities by at least $75,000
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B) Current assets exceeding current liabilities by at least $150,000
C) Current assets exceeding current liabilities by at least $17,000, or a total net worth of at least
$80,000, or a $175,000 surety bond
D) Current assets exceeding current liabilities by at least $17,000, or a total net worth of at least $80,000
Answer: C
Rationale: For a Limited License, the applicant must have either: (1) working capital of $17,000 (current
assets minus current liabilities), (2) net worth of $80,000, or (3) a $175,000 surety bond.
Question 3
A builder is constructing a multi-unit residential building with 10 condominium units, each valued at
$15,000. The total project cost, excluding land, is $150,000. Is the general contractor required to have a
license?
A) No, because each individual unit is valued below $30,000.
B) Yes, because for multi-unit buildings with three or more units, all units in the building are aggregated
to determine the $30,000 threshold.
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C) No, because the project is residential and an exemption applies.
D) Yes, only if the contractor is performing the work as a subcontractor.
Answer: B
Rationale: 21 NCAC 12 .0211 provides that for projects consisting of three or more units within each
building (including apartments, condominiums, and townhomes), all units in the building are considered
in determining the cost of the undertaking under G.S. 87-1. Since $150,000 exceeds $30,000, a license is
required.
Question 4
A contractor has held a North Carolina contractor license for three years with a designated qualifier. The
qualifier suddenly resigns. Within how many days must the contractor notify the Board of this change?
A) 5 days
B) 10 days
C) 30 days
D) 90 days
