Georgia Business & Law Exam (Residential and General Contractors)

Georgia Business & Law Exam: Complete 2026 Study Guide for Contractors

You've put in the work on the tools side. Now comes the part that trips up a surprising number of contractors: the Georgia Business & Law Exam. Whether you're applying for a residential or general contractor license, this 50-question test stands between you and your license — and it covers everything from contract law to OSHA recordkeeping to payroll taxes. The good news? It's open book, and with the right preparation, it's very passable. This guide walks you through every topic, shares sample questions, and tells you exactly how to study smart. Start with our free practice exam to see where you stand right now.

Georgia Business & Law Exam Overview

The Georgia Business & Law Exam is administered by PSI and required for residential and general contractor license applicants in Georgia. Here's what you're working with:

• Questions: 50 scored questions
• Time limit: 120 minutes (2 hours)
• Passing score: 70%, which means you need at least 35 correct answers
• Format: Multiple choice, open book
• Exam fee: $60
• Allowed reference: One specific book only (more on that below)
• Calculator: Permitted — silent, nonprinting, non-programmable, battery-operated

The PSI Georgia Business & Law Exam is offered at PSI testing centers throughout the state. You can review testing locations, available dates, and registration details on the official exam bulletin.

Topics Covered on the Georgia Contractor Business Law Exam

The exam spans nine topic areas. Here's a breakdown of what's covered and how heavily each area is weighted — pay attention to the item counts, because that's where you should focus your study time.

• Estimating and Bidding (7 items): Bid documents, ethics in bidding, quantity take-offs, labor cost calculation, labor burden, and equipment costs. Tied for the most heavily weighted topic.
• Business Organization and Financial Management (7 items): Business entity types, Georgia registration requirements, financial statements, financial ratios, and contract accounting methods. Also 7 items — don't skip this one.
• Project Management and Lien Law (6 items): Scheduling methods (including CPM), project life cycle phases, supervisory team roles, budget tracking, and cash flow.
• Contracts (6 items): Elements of a binding contract, payment terms, contracting methods, breach of contract, and change orders.
• Licensing Requirements (5 items): License classifications, eligibility, insurance requirements, qualifying agent roles, and exam exemptions.
• Tax Laws (5 items): EIN requirements, federal income tax by entity type, self-employment tax, FICA and FUTA, and payroll deposit schedules.
• Labor Laws (5 items): FLSA requirements, I-9 documentation, Georgia new hire reporting, rules for hiring minors, and anti-discrimination laws.
• Environmental and Safety (5 items): OSHA recordkeeping, violation types, emergency action plans, Safety Data Sheets, and asbestos regulations.
• Risk Management (4 items): Risk assessment, property insurance, liability insurance, workers' compensation, and surety bond types.

Estimating and Bidding and Business Organization carry the most weight at 7 items each. Project Management, Contracts, and Risk Management all follow closely. Build your prep around the heavier topics first.

Sample Georgia Business & Law Practice Test Questions

Here are five questions drawn from the same topic areas you'll face on the real exam. Work through them — but note that the answers are not revealed here. Test yourself, then take our free practice exam to see how you do.

Question 1 — Licensing Requirements
What is the maximum number of annual continuing education hours that the appropriate division may require as a condition of renewal for a general contractor license in Georgia?
- A) Eight hours
- B) Three hours
- C) Ten hours
- D) Six hours

Question 2 — Labor Laws
An employee suffers a work-related injury in Georgia and is temporarily totally disabled. What weekly income benefit is the employee entitled to receive?
- A) Two-thirds of the average weekly wage
- B) One-half of the average weekly wage
- C) The full average weekly wage
- D) Three-quarters of the average weekly wage

Question 3 — Business Organization and Financial Management
Under the Georgia Prompt Pay Act, a contractor receives retainage from the owner. Within how many days must the contractor pass through retainage payments to subcontractors whose work is at least 50 percent complete?
- A) 7 days
- B) 15 days
- C) 10 days
- D) 5 days

Question 4 — Environmental and Safety
A written Notice of Intent for asbestos work must be submitted how many working days prior to starting construction activities?
- A) 14 working days
- B) 7 working days
- C) 5 working days
- D) 10 working days

Question 5 — Labor Laws
An employer must retain completed I-9 forms on file for at least how long after the date of hire, or one year after employment ends, whichever is later?
- A) Three years
- B) One year
- C) Five years
- D) Two years

Know the answers? Take the free practice exam to check yourself and get instant feedback.

What Types of Questions to Expect

Our full question bank contains 245 practice questions across all nine exam topics. Here's what each area tests:

• Licensing Requirements (21 practice questions): Expect questions on license classifications, what each tier allows you to build, insurance minimums, and the qualifying agent's responsibilities.
• Estimating and Bidding (34 practice questions): These cover quantity take-off calculations, how to figure labor burden, material and equipment costs, and bid ethics — including what constitutes bid shopping or bid rigging.
• Business Organization and Financial Management (35 practice questions): You'll work through financial ratio calculations (liquidity, quick, debt), read balance sheets and income statements, distinguish between business entity types, and apply contract accounting methods like percentage of completion.
• Tax Laws (26 practice questions): Questions here test EIN rules, which IRS forms apply to which entity types, self-employment tax thresholds, FICA and FUTA obligations, and payroll deposit timing including the $100,000 one-day rule.
• Labor Laws (24 practice questions): Covers FLSA overtime rules, I-9 retention timelines, Georgia new hire reporting deadlines, restrictions on hiring minors in construction, and Title VII / ADA / ADEA requirements.
• Project Management and Lien Law (29 practice questions): Expect scheduling problems involving CPM float time, questions on project phases, and budget/cash flow tracking scenarios.
• Contracts (31 practice questions): These questions test your knowledge of what makes a contract binding, lump sum vs. cost-plus payment structures, change order requirements, and what happens when a material breach occurs.
• Risk Management (21 practice questions): You'll identify the right insurance type for a given scenario — builders' risk vs. inland marine, CGL vs. umbrella — and distinguish between surety bond types.
• Environmental and Safety (24 practice questions): Covers OSHA form numbers, violation classifications and fines, SDS requirements, and asbestos notification timelines.

The full practice exam mirrors the real Georgia Business & Law Exam — 50 questions, 120-minute timer, same topic breakdown — and gives you a score report by topic so you can see exactly where to focus.

Required Study Materials

Because this is an open-book exam, you're only allowed one reference inside the testing center:

The Georgia-NASCLA Contractors Guide to Business, Law and Project Management, Georgia State Licensing Board for Residential and General Contractors, 3rd Edition. This is the only book permitted. Buy it early — you need time to learn it before test day, not just own it.

Once you have your book, prep it properly:

Highlight strategically. Sharpie Tank Highlighters are a solid choice — wide barrel, large ink supply, and a narrow chisel tip that works well for underlining and margin notes. The assorted 12-pack gives you enough colors to build a color-coding system by topic (yellow for contracts, green for tax, orange for safety, and so on).

Tab every major section. Redi-Tag Permanent Colored Tabs are exactly what the exam rules require — permanent adhesive only, no Post-It notes allowed. The 100-tab pack in five tropical colors lets you color-code by the nine exam topic areas and still have plenty left over. Get these in place before your first study session so you're building location memory from day one.

With your book highlighted and tabbed, practice finding topics in under 10 seconds. That speed is what wins on this exam.

Study Tips for the Georgia Business and Law Practice Test

Tab it, highlight it, know it cold. On an open-book exam, the winners aren't the smartest people in the room — they're the fastest at finding answers. Learn the index and table of contents until you can land on any topic in seconds.

Use a two-pass strategy on test day. Work through every question once: answer what you know, skip what you don't. Then return to the flagged questions. Our practice exams let you bookmark questions for review, so you can build that habit now. Don't sink too much time into any single question — the clock is still running.

Give yourself three to six weeks. Use the Candidate Information Bulletin (CIB) as your roadmap, and prioritize finding-it-fast skills over memorization. Aim for three clean practice runs at 80% or above — setting your practice bar above the 70% cut score gives you real cushion on test day.

Practice under time pressure. Timed practice sessions beat exam-clock anxiety. Use timed tests to build steady pacing so the format feels routine before you ever sit down at a PSI terminal.

Frequently Asked Questions

How much does the Georgia Business & Law Exam cost?
The exam fee is $60, paid at registration through PSI.

How many questions are on the exam and how long do I have?
The exam has 50 scored questions, and you have 120 minutes (2 hours) to complete it.

What is the passing score?
You need to answer at least 35 questions correctly — that's 70%.

Is the Georgia Business & Law Exam open book?
Yes. The only reference material allowed in the testing center is the Georgia-NASCLA Contractors Guide to Business, Law and Project Management, 3rd Edition. No other books, notes, or papers are permitted.

Can I write in my reference book or use sticky notes as tabs?
You may highlight, underline, and use permanent adhesive tabs — which is exactly why Redi-Tag permanent tabs are the right tool. Post-It notes and any other temporary tabs must be removed before the exam begins. Writing in the book and loose papers of any kind are not allowed.

Can I use a calculator?
Yes. Your calculator must be silent, nonprinting, battery-operated, non-programmable, and must not have an alphabetic keyboard.

How do I register?
First get your application approved by the State Licensing Board. After approval, you'll receive instructions for contacting PSI. You can register at the exam registration page online 24/7, or by phone Monday–Friday 7:30 am–10:00 pm ET, or Saturday–Sunday 9:00 am–5:30 pm ET.

How many times can I take the exam if I fail?
On your first exam approval, you get 2 attempts within the 1-year eligibility period. If you fail twice, you must wait at least 1 year after your last attempt before a third try. On any subsequent approval period, you get only 1 attempt.

How long is my eligibility valid?
One year from the date on your exam approval letter. If you don't pass within that window, you'll need to reapply with the Board. You can confirm current policies on the state licensing website.

What ID do I need on exam day?
One current, government-issued photo ID that includes your name, signature, and photograph — a driver's license, state ID, U.S. passport, military ID, or Alien Registration Card. No temporary IDs are accepted.

You're Closer Than You Think

The Georgia Business & Law Exam is very manageable with the right prep. Get your NASCLA book, highlight and tab it thoroughly, and work through realistic practice questions under timed conditions. Start today with our free practice exam — 10 questions, no account required, and a good first look at the format. When you're ready to go deep, the full practice exam gives you 245 questions across all nine topics, a real exam timer, and a score breakdown by subject. Your license is within reach.