North Carolina Business and Law Exam (General Contractors)

North Carolina Business and Law Exam: Complete Study Guide for General Contractors (2026)

You've put in the work to qualify for your North Carolina general contractor license. Now there's one more hurdle: the North Carolina Business and Law Exam. It covers state law, licensing rules, lien rights, subcontractor payments, erosion control, and underground utility safety. Pass it, and you're licensed. Skip the prep, and you're looking at a retake fee and a delay in getting to work.

This guide breaks down exactly what's on the exam, how it's structured, what to study first, and how to get ready fast.

NC Business and Law Exam Overview

The North Carolina general contractor business and law exam is administered by PSI. Here's what you're working with:

• Questions: 40 scored questions
• Time limit: 90 minutes
• Passing score: 70% — that's 28 out of 40 correct
• Format: Open book (more on that below)
• Exam fee: $79, whether it's your first attempt or a retake — non-refundable and non-transferable

You must receive an Eligibility Letter from the North Carolina Licensing Board for General Contractors before you can register. Once you have it, you can register through the exam registration page — online 24 hours a day, or by phone at (855) 746-8173 during business hours. Your Eligibility Letter is valid for 120 days and covers one exam attempt.

If you don't pass, you can retake as many times as you need within a 12-month period, as long as your application information stays current. You'll get your score and a new exam authorization by email within 3 working days of PSI sending results to the Board.

What Topics Are on the Exam?

Five topic areas make up the PSI North Carolina Business and Law Exam. Here they are, ranked by how heavily each one is tested:

Licensing — 21 Items

This is the biggest chunk — more than half the exam. It covers license classifications (Building, Residential, Highway, Public Utilities, Specialty, and Unclassified), license limitations (Limited, Intermediate, Unlimited), working capital and surety bond requirements, qualifier roles and exam requirements, the application process, renewal, continuing education, and inactive or invalid license status. Know this section cold.

Liens and Bonds — 8 Items

Mechanics' lien rights, the NC lien agent system, how to file and perfect a claim of lien, notice requirements, and lien foreclosure procedures. North Carolina has a specific lien agent designation system — it shows up on the exam and it's different from most other states.

One Call — 5 Items

North Carolina's NC811 excavation notification system: timing requirements, notification types, positive response codes, APWA color codes for utility marking, and tolerance zone rules.

Erosion and Sedimentation Control — 3 Items

The Sedimentation Pollution Control Act of 1973, plan requirements and approval, mandatory standards for land-disturbing activity, storm design standards, and self-inspection requirements.

Subcontractor's Pay Requirements — 3 Items

North Carolina's payment protection rules under NCGS Chapter 22C: the seven-day payment rule, the ban on pay-if-paid and pay-when-paid clauses, permissible grounds for withholding payment, interest penalties on late payments, and retainage limits.

Sample Exam Questions

Here's a look at the kind of questions you'll see on the North Carolina Business and Law Exam. Work through them — but we won't give you the answers here. Take our free practice exam to see how you do.

Question 1 — Liens and Bonds (Hard)

A private developer on a public development contract under G.S. 143-128.1C wants to discharge a subcontractor's claim of lien by filing a payment bond with the clerk of superior court. The surety's affidavit must state that the bond's penal sum minus amounts paid to other claimants and minus other filed lien claims exceeds the discharged claim by at least what percentage?

A) 100%
B) 150%
C) 110%
D) 125%

Question 2 — Erosion and Sedimentation Control (Medium)

An approved erosion and sedimentation control plan has been on file for a tract where no land-disturbing activity has been undertaken. After how many years does the plan expire?

A) 5 years
B) 3 years
C) 2 years
D) 1 year

Question 3 — Licensing (Hard)

A military spouse applies for a North Carolina general contractor license. In addition to submitting a complete application and the required license fee, the applicant must also provide documentation satisfying the conditions of which statute?

A) G.S. 87-11
B) G.S. 87-10.2
C) G.S. 93B-15.1
D) G.S. 87-15.1

Question 4 — Liens and Bonds (Medium)

Any person entitled to bring or defend an action on a public payment bond may require the contracting body to furnish a certified copy of the bond and construction contract. Upon receiving a proper request, within how many days must the contracting body provide the certified copy?

A) 10 days
B) 5 days
C) 15 days
D) 7 days

Question 5 — Licensing (Medium)

In addition to reimbursing applicants, the Homeowners Recovery Fund may be used by the Board for which of the following purposes?

A) Subsidizing continuing education programs
B) Funding Board member salaries
C) Paying fines imposed on contractors
D) Purchasing insurance to cover reimbursable losses

Think you know the answers? Try our free practice exam and find out.

What Types of Questions to Expect

Here's what you'll actually be doing on exam day, broken down by topic — and how many practice questions we have available for each:

Licensing (96 practice questions): Expect scenario-based questions where you identify the correct license classification for a given scope of work, determine whether a contractor meets financial requirements for a license limitation tier, or sort out qualifier responsibilities. Statute citations like G.S. 87-10 and G.S. 87-15.1 come up often.

Liens and Bonds (34 practice questions): These test your ability to apply lien deadlines, identify who has lien rights at each contract tier, and work through the NC lien agent notice system. Some questions involve bond requirements for public contracts or lien foreclosure timelines.

One Call (26 practice questions): Questions here cover the exact notification windows (three full working days, the 3–12 working day window), NC811 notification types, what the APWA color codes mean, how the positive response system works, and what you can and can't do inside the tolerance zone.

Erosion and Sedimentation Control (15 practice questions): Expect questions about plan approval requirements, what activities are exempt under the 1973 Act, buffer zone and slope standards, and storm design criteria for erosion control measures.

Subcontractor's Pay Requirements (11 practice questions): These questions test the specific rules in NCGS Chapter 22C — the seven-day payment clock, what qualifies as a legitimate reason to withhold payment, the interest rate on late payments, and retainage limits.

Total practice questions available across all topics: 182.

Study Materials

This exam is open book — and that changes how you prep. You're not memorizing statutes; you're learning to find them fast.

The allowed references are:
- Contractor's Guide to Business, Law and Project Management – North Carolina General Contractors Edition, 10th Edition (NASCLA)
- North Carolina Excavation Safety Guidelines (2022 or later)
- Two North Carolina sedimentation control references

You bring your own copies. They can be highlighted and tabbed — but permanent tabs only. No sticky notes or non-permanent tabs.

To set your books up right, grab these:

Redi-Tag Permanent Colored Tabs — 100 laser tabs in five colors (purple, green, blue, dark blue, orange). Use a different color for each topic area. These stay put through repeated use, and since they're permanent, they're exam-legal. Color-code by subject so you can go straight to the right section without flipping around.

Sharpie Tank Highlighters — A 12-pack in assorted fluorescent colors. Use one color for definitions, another for deadlines, another for dollar thresholds. The chisel tip is good for both wide highlighting and underlining key phrases. Bright ink makes the critical passages jump off the page when you're scanning under exam pressure.

Check the official exam bulletin for the complete and current list of approved references before your exam date.

Study Tips That Actually Matter

Tab and highlight your books before anything else. 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. That speed separates a pass from a fail.

Work through every question once, then go back. Answer what you know, flag what you don't, keep moving. You can bookmark questions for review — we use the same feature in our practice exams. Don't burn four minutes on one question while six others sit unanswered.

Give yourself three to six weeks. Use the Candidate Information Bulletin as your roadmap. Focus on finding-it-fast skills over memorization. Aim for three clean practice runs at 80% or higher — setting your target above the 70% cut score gives you room to miss a few on the real thing.

Practice with a timer. Exam-clock anxiety is real. Timed practice runs teach you to pace steadily. By test day, the format should feel routine.

Bring the right ID and calculator. One valid, unexpired, government-issued photo ID — driver's license, passport, military ID, or similar. For a calculator: silent, battery-operated, non-programmable, no paper tape, no alphabetic keyboard. Programmable calculators aren't allowed.

Frequently Asked Questions

How many questions are on the North Carolina Business and Law Exam for General Contractors?
The exam has 40 scored questions.

How long do I have to complete the NC Business and Law Exam?
You have 90 minutes.

What is the passing score for the North Carolina Business and Law Exam?
70% — that's 28 out of 40 questions correct.

What is the exam fee?
$79 per attempt, first time or retake. Non-refundable and non-transferable.

How do I register for the NC Business and Law Exam?
After you receive your Eligibility Letter from the North Carolina Licensing Board for General Contractors, register at the exam registration page (online, 24/7) or call PSI at (855) 746-8173. Phone hours: Monday–Friday 7:30 am–10:00 pm ET, Saturday–Sunday 9:00 am–5:30 pm ET.

How long is my Eligibility Letter valid?
120 days from the date on the letter. It covers one exam attempt within that window.

Can I retake the exam if I fail?
Yes — as many times as you need within a 12-month period, as long as your application information remains valid. You'll receive a revised exam authorization and your scores by email within 3 working days of the Board receiving results from PSI.

Is the exam open book?
Yes. You may bring the NASCLA Contractor's Guide to Business, Law and Project Management – NC General Contractors Edition, 10th Edition, the NC Excavation Safety Guidelines (2022 or later), and two NC sedimentation control references. Materials may be highlighted and tabbed with permanent tabs only. Bring your own copies.

What ID do I need on exam day?
One valid, unexpired, government-issued photo ID. The name must match your registration exactly.

Can I bring a calculator?
Yes — silent, battery-operated, non-programmable, no paper tape, no alphabetic keyboard. No programmable calculators.

Ready to Start Preparing?

You know what's on the exam. You know the rules. Now it's time to find out where you actually stand.

Start with our free practice exam — 10 questions, no account required, no cost. Get a feel for the format and question style. Then move to the full practice exam for 40 questions timed at 90 minutes, drawn from a large question pool covering all five topics, with a detailed score breakdown by topic so you know exactly where to focus.

Visit the official exam bulletin for the complete Candidate Information Bulletin. Get your books, tab them, and start practicing. The license is within reach.