Mississippi - Law and Business Management Exam

Mississippi Law and Business Management Exam: What You Need to Know to Pass

You've done the work. Now you need the license. The Mississippi Law and Business Management exam stands between you and your contractor's license, and it's not something you want to walk into cold. The good news: it's open book, it's 50 questions, and with the right prep, it's very passable. This guide covers everything — what's on the exam, what the questions look like, what to study, and how to register. Start with our free practice exam to get a feel for the format before you go further.

Exam Overview

The Mississippi PSI Law and Business exam is administered by PSI and is required for every contractor applying for a commercial or residential license in the state.

Here's the breakdown:

• Questions: 50 scored questions (a small number of additional experimental questions may also appear — these are unscored and don't affect your result)
• Time limit: 120 minutes
• Passing score: 70% — that's 35 out of 50 scored questions correct
• Format: Multiple choice, open book
• Reference allowed: NASCLA Contractors Guide to Business, Law and Project Management – Mississippi, 6th Edition only

Yes, it's open book. But don't let that fool you into thinking you can wing it. Fifty questions in two hours goes faster than you think, and if you're hunting through your book for every answer, you'll run out of time. Know the material. Use the book to confirm, not to learn on the fly.

Register through the exam registration page or by calling PSI at (855) 557-0619. The fee is $120 per attempt, non-refundable.

What Topics Are on the Exam

The exam covers 11 topic areas. Here's how they're weighted, heaviest to lightest:

• Contracts (6 items): Contract types, required elements, breach, payment provisions, and dispute resolution
• Estimating and Bidding (7 items): Take-offs, overhead, markup, bid documents, and bidding ethics
• Licensing (5 items): Dollar thresholds, exemptions, application process, classifications, and insurance requirements
• Financial Management (5 items): Bookkeeping, financial statements, ratio analysis, and contract accounting methods
• Tax Laws (5 items): EIN requirements, federal tax forms, employment taxes, deposit schedules, and self-employment tax
• Labor Laws (5 items): FLSA, child labor, I-9 verification, ADA, and new hire reporting
• Project Management (5 items): Scheduling methods (CPM, bar chart), project phases, and supervisory roles
• Environmental and Safety (5 items): OSHA recordkeeping, hazardous materials, SDS, lead paint, and asbestos
• Risk Management (4 items): Insurance types, surety bonds, workers' comp, and bond claims
• Business Organization (2 items): Sole props, partnerships, corporations, S-corps, and LLCs
• Lien Law (1 item): Who can file, filing timelines, notice requirements, and the 180-day rule

Estimating and Bidding carries the most weight, followed by Contracts. Those two areas alone account for 13 of your 50 questions — study them hard.

Sample Questions

Here are five real-style questions to give you a feel for what you're up against. Read each one carefully. We're not posting the answers here — try the free practice exam and test yourself.

Question 1 — Lien Law (Medium)

A payment bond used to discharge a mechanics' lien from real estate must be in an amount equal to what percentage of the amount claimed under the lien?

• A) 100%
• B) 110%
• C) 105%
• D) 115%

This one tests a specific statutory number. You either know it or you look it up — fast.

Question 2 — Environmental and Safety (Medium)

You are a general contractor managing a commercial renovation project. During an OSHA inspection, the compliance officer asks to verify that chemical hazard information is accessible to workers on site. Which of the following must you have available at the worksite to satisfy this requirement?

• A) The manufacturer's product warranty documents for each chemical
• B) A list of emergency room locations nearest to the jobsite
• C) Safety Data Sheets (SDS) for all chemicals used in the workplace
• D) A copy of each chemical supplier's business license

Practical scenario. Know your OSHA Hazard Communication Standard requirements.

Question 3 — Environmental and Safety (Easy)

Under the Clean Water Act, it is unlawful for any person to discharge any pollutant from a point source into navigable waters of the United States unless which of the following has been obtained?

• A) An EPA Clean Air Compliance Certificate
• B) A state environmental impact assessment
• C) A municipal wastewater treatment authorization
• D) A National Pollutant Discharge Elimination System (NPDES) permit

Regulatory knowledge — one specific permit name you need to recognize.

Question 4 — Labor Laws (Medium)

You have just hired a 15-year-old to perform office work at your construction company during the summer break. What is the latest this minor may work?

• A) 10 p.m.
• B) 9 p.m.
• C) 7 p.m.
• D) 8 p.m.

Child labor hour restrictions vary by age and school status. Know the FLSA specifics.

Question 5 — Contracts (Easy)

A contract provision that defines the contractor's responsibility for the repair of defects after completion of work, often set forth for a defined time period, is known as a ______.

• A) Retainage agreement
• B) Warranty or guaranty
• C) Force majeure clause
• D) Indemnification clause

Vocabulary question. Straightforward if you know your contract terms.

What Types of Questions to Expect

Our full practice bank has 270 questions across all 11 topics. Here's what you'll find in each area:

• Licensing (23 practice questions): Questions on dollar thresholds triggering commercial vs. residential license requirements, exemptions, application documentation, financial and insurance requirements, and license classifications.
• Estimating and Bidding (32 practice questions): Quantity take-off calculations, overhead percentage math, markup for profit, bid document requirements, addenda handling, and ethics scenarios involving bid shopping or rigging.
• Lien Law (16 practice questions): Who qualifies to file a mechanics' lien, filing timelines, notice requirements (registered/certified mail rules), the 180-day rule for commencing action, and the 60-day deemed-paid rule on interim waivers.
• Financial Management (24 practice questions): Reading and interpreting balance sheets, income statements, and cash flow statements; calculating financial ratios (liquidity, quick, debt, profitability); and applying completed contract vs. percentage of completion accounting.
• Tax Laws (26 practice questions): EIN requirements, federal tax forms by entity type, FICA and FUTA calculations, payroll deposit schedules, and self-employment tax thresholds.
• Labor Laws (23 practice questions): FLSA overtime rules, child labor hour and hazard restrictions, I-9 compliance, ADA reasonable accommodation obligations, and Mississippi new hire reporting requirements.
• Project Management (36 practice questions): Reading bar charts, CPM scheduling, calculating float time, sequencing tasks, and understanding the roles of superintendent, foreman, materials expediter, and owner's representative across project life cycle phases.
• Contracts (35 practice questions): Identifying contract elements, distinguishing contract types (lump-sum, unit-price, cost-plus, turnkey), analyzing breach scenarios, understanding retainage and final payment docs, and applying dispute resolution methods.
• Business Organization (10 practice questions): Comparing sole proprietorships, partnerships, corporations, S-corps, and LLCs on liability, taxation, and Mississippi registration requirements.
• Risk Management (20 practice questions): Coverage types (CGL, BOP, automobile, property), surety bond types and qualifying requirements, Mississippi workers' comp obligations, and the bond claims process.
• Environmental and Safety (25 practice questions): OSHA Forms 300/300A/301, penalty categories, SDS requirements, lead pre-renovation education rules, and asbestos notification and abatement procedures.

Study Materials

One book. That's all you're allowed to bring into the exam room.

NASCLA Contractors Guide to Business, Law and Project Management – Mississippi, 6th Edition

This is the only reference allowed at the test center, and as of October 1, 2023, only the 6th Edition is referenced on the exam. Get this edition specifically — not an older one. Every question on the Mississippi business and law exam is written with this book in mind.

Before exam day:
- Tab every major topic section with permanent index tabs
- Highlight key definitions, formulas, and thresholds
- Do NOT write in the margins — that's prohibited
- Remove any Post-It notes or temporary tabs before you walk in

Your copy of the NASCLA guide is your lifeline on test day. Treat it like a tool, not a textbook. Know where everything lives so you can find it in under 30 seconds.

Study Tips

Start with the heavy hitters. Estimating and Bidding (7 questions) and Contracts (6 questions) are your biggest return on study time. Get those cold before you move on.

Learn the formulas. Financial Management and Estimating both have calculation-based questions. Write out the key formulas — overhead percentage, markup, financial ratios — and practice them until they're automatic.

Tab your book strategically. Create a tab for each of the 11 exam topics. During the exam, if you're unsure, you can go straight to the right section instead of flipping through pages.

Take the practice exam more than once. The goal is to consistently score above 70% — not just hit it once. When passing feels routine in practice, you'll walk into the real test with confidence. Our full practice exam mirrors the real PSI exam — same question count, same time limit, same topic breakdown. That format familiarity matters.

Don't skip Lien Law. It's only one question on the exam, but lien law questions tend to test specific numbers and timelines that are easy to miss if you've never read that chapter.

Frequently Asked Questions

How many questions are on the Mississippi Law and Business Management Exam?
The exam has 50 scored questions. PSI may include a small number of additional experimental (unscored) questions — roughly up to 10% more — but those don't affect your score.

How long do I have to complete the exam?
Two hours (120 minutes). Budget your time — that's about 2.4 minutes per question on average.

What is the passing score?
You need to answer at least 70% correctly, which works out to 35 out of 50 scored questions.

Is the Mississippi Law and Business Management Exam required for all contractors?
Yes. It's mandatory for any contractor applying for a commercial or residential license in Mississippi — no exceptions.

Is the Mississippi business and law exam open book?
It is. You may bring your NASCLA Contractors Guide (6th Edition only). You can highlight and add permanent index tabs, but you cannot write in it, and no loose papers or temporary tabs (like Post-Its) are allowed.

How much does it cost to register?
The exam fee is $120 per attempt. It's non-refundable and non-transferable, whether it's your first time or a retake.

How do I register?
First, apply through the state licensing website and receive eligibility notification from PSI. Then register through the exam registration page or call PSI at (855) 557-0619.

What ID do I need on test day?
One valid, non-expired government-issued photo ID that also has your signature — driver's license, U.S. passport, military ID, or similar. The name must match your exam registration exactly.

What if I fail?
You can retake the exam as many times as needed within your 6-month eligibility window. If you don't pass within that window, you'll need to reapply with the Mississippi Contractor Licensing Board.

Get Started

The Mississippi Law and Business Management exam is straightforward if you prepare the right way. Get your NASCLA Contractors Guide – Mississippi 6th Edition, tab it properly, and put in the practice time. Check the official exam bulletin for the latest scheduling and eligibility details.

Ready to see where you stand right now? Take our free practice exam — 10 questions, no account needed, no payment required. It's the fastest way to find out what you know and what needs work before you spend $120 on the real thing.