Start Practice Test

Georgia Business & Law Exam — Practice Exam Guide

Residential and General Contractors

What This Practice Exam Covers

The Georgia Business & Law Exam tests residential and general contractor license candidates on 9 topic areas across 50 questions. You have 120 minutes to complete the exam, and you need a score of 70% (35 correct) to pass.

This practice exam is available in two versions:

Free practice exam: 10 questions per attempt, drawn from a limited pool. You can retake it as many times as you like — it's the fastest way to get a feel for question style, phrasing, and difficulty before committing to a full study session. Start here.

Full practice exam (paid): 50 questions, 120-minute time limit — a true mirror of the real exam. Questions are drawn from a pool of 245+ items, so every attempt is genuinely different. No duplicate exams. Questions map directly to the topic distribution provided by the official test provider, so the balance of easy and difficult material matches what you will face on test day.

What You'll Be Tested On

Licensing Requirements — 5 items

Questions test the four license classifications under Georgia law: residential-basic, residential-light commercial, general contractor, and limited tier. You must know the scope of work each classification permits, eligibility and experience requirements for each type, and the financial responsibility thresholds including general liability coverage, workers' compensation, and net worth minimums (Georgia Contractor Licensing, Ch. 3 covers net worth specifically). Qualifying agent questions are common — know what a qualifying agent must do when affiliating with a business entity and what happens when that affiliation ends. Also expect questions on continuing education hours required for renewal, reinstatement procedures, and which applicants are exempt from examination under Georgia Residential and General Contractors Licensing Law, § 43-41-6.

Estimating and Bidding — 7 items

This is one of the two heaviest topic areas. Expect calculation-based questions on the quantity take-off method — you may need to compute total material quantities from blueprints and apply a unit cost. Labor cost questions require you to add labor burden (roughly 30% above base wages) covering FICA, FUTA, workers' compensation, and benefits. Know the difference between project overhead (costs tied to a specific job, like a job-site trailer) and company overhead (fixed business costs allocated across jobs), and how to calculate an overhead percentage. Bid ethics questions distinguish bid shopping (contractor reveals sub-bids to get lower prices), bid peddling (subcontractor undercuts a competitor after bid opening), and bid rigging (illegal coordination among bidders). Equipment cost questions distinguish owned equipment (depreciation + operating cost) from rental. Sources: NASCLA Contractors Guide, Bidding and Estimating chapter — multiple sections.

Business Organization and Financial Management — 7 items

Also 7 items, tied for the heaviest section. Know the liability exposure, taxation rules, and management structure of sole proprietorships, general and limited partnerships, C corporations, S corporations, and LLCs. Georgia Secretary of State filing requirements and name reservation rules appear here. Financial statement questions use the balance sheet (assets = liabilities + equity), income statement, and statement of cash flows. Ratio questions include the liquidity ratio, quick ratio, debt ratio, and return on assets — know the formulas and what they indicate. Contract accounting methods — completed contract, percentage of completion, and cost comparison — each have a specific use case the exam tests. The Georgia Prompt Pay Act (NASCLA Contractors Guide, Appendix H) governs payment timing; know the deadlines under § 13-11-4(a) and § 13-11-4(b).

Tax Laws — 5 items

Know when an Employer Identification Number is required and how to apply. Understand which IRS forms correspond to each business entity type. Self-employment tax applies when net earnings reach a specific threshold. Federal employment tax questions cover FICA (Social Security and Medicare), FUTA, and federal income tax withholding. The $100,000 one-day rule for payroll deposits is a favorite exam target — if accumulated payroll tax liability hits $100,000 on any day, deposit is required the next business day. Know penalty structures for late deposits. Source: NASCLA Contractors Guide, Tax Basics chapter.

Labor Laws — 5 items

The Fair Labor Standards Act governs minimum wage and overtime (1.5× regular rate for hours over 40 in a workweek). Know the I-9 verification process and which documents are acceptable. Georgia new hire reporting requires reporting within a specific deadline after the hire date. Hiring minors in construction has strict hour restrictions and a list of prohibited hazardous tasks. Anti-discrimination coverage spans Title VII, ADA, ADEA, and the Equal Pay Act — know which protected class each law covers. Georgia workers' compensation coverage thresholds are tested under Appendix I, § 34-9-261.

Project Management and Lien Law — 6 items

Scheduling questions test calendar scheduling, bar charts (Gantt charts), and critical path method (CPM). For CPM, know how to identify float time and the critical path itself. Supervisory roles — project manager, superintendent, foreman, and materials expediter — each have distinct responsibilities the exam distinguishes. Georgia lien law questions ask who qualifies to file a lien, the 90-day filing window for equal priority among lienholders (O.C.G.A. § 44-14-361.1(b)), and procedural requirements from NASCLA Contractors Guide, Chapter 16.

Contracts — 6 items

Know all five required elements of a binding contract: offer, acceptance, consideration, competent parties, and legal purpose. Contract price types — lump sum, unit price, and cost-plus — each carry specific risk profiles. Contracting methods tested include single prime, design/build, construction management, turnkey, and fast-track. For breach questions, distinguish material from immaterial breach and know what liquidated damages clauses do. Change order questions ask whether oral modifications are enforceable and what distinguishes an addendum (pre-execution) from a modification (post-execution). ADR methods — negotiation, mediation, collaborative law, and arbitration — are tested in order of escalating formality.

Risk Management — 4 items

Know the difference between builders' risk, inland marine, and equipment floater policies. Liability insurance questions test Commercial General Liability (CGL), umbrella, completed operations, and professional liability coverage. Surety bond types are heavily tested: bid bond, performance bond, payment bond, maintenance bond, and fidelity bond each protect a different party from a different risk. The Miller Act (40 U.S.C. § 3131) requires performance and payment bonds on federal construction projects. Know the basic bond qualification factors and how a bond claim is initiated.

Environmental and Safety — 5 items

OSHA recordkeeping questions test Form 300 (injury log), Form 300A (annual summary), and Form 301 (incident report). Know OSHA violation classifications — willful, serious, other-than-serious, and repeat — and the penalty ranges for each (NASCLA Contractors Guide, Jobsite Safety chapter — Penalties section). Safety Data Sheets have 16 required sections under the Hazard Communication Standard. Asbestos questions address inspection requirements before demolition and the Georgia program requirements (NASCLA Contractors Guide, Page 118). Lead-based paint renovation questions test Lead PRE (Pre-Renovation Education) rule compliance for work in pre-1978 housing.

Worked Sample Questions

Sample 1 — Estimating and Bidding

Question: As an employer preparing a bid, you must account for employment taxes, insurance, and benefits beyond basic wages. This additional cost, which adds approximately 30 percent to labor costs, is referred to as ______.

• A. Contingency markup
• B. Labor burden
• C. Company overhead
• D. Project overhead

Correct Answer: B — Labor burden

Labor burden is the total of employer-paid costs that sit on top of an employee's base wage: Social Security and Medicare taxes, federal and state unemployment insurance, workers' compensation premiums, general liability insurance, and benefits such as health insurance and paid leave. Because these costs travel with every hour worked, they must be included in the labor cost line of any bid — not buried in overhead or markup. The exam expects you to know that labor burden adds approximately 30% to base wage costs and that it is categorically different from project overhead (job-specific indirect costs) or company overhead (firmwide fixed costs). Confusing labor burden with overhead is a common wrong-answer trap.
Source: Georgia-NASCLA Contractors Guide, Page 7-4

Sample 2 — Project Management and Lien Law

Question: Under Georgia law, all liens for repairs, building, or furnishing materials on the same property share equal priority when filed within what time period after the work is done?

• A. 90 days
• B. 60 days
• C. 120 days
• D. 30 days

Correct Answer: A — 90 days

Under O.C.G.A. § 44-14-361.1(b), all liens for repairs, building, or furnishing materials or services on the same property are treated as having the same filing date — and therefore equal priority — when filed within 90 days after the work is completed. This matters because a subcontractor who finishes work two months before a supplier delivers final materials will not automatically outrank that supplier in a lien dispute, as long as both file within the 90-day window. The wrong answers (30, 60, and 120 days) are plausible-sounding numbers that the exam uses to catch candidates who never committed the actual statute to memory.
Source: NASCLA Contractors Guide, Chapter 16 — Priority section; Appendix J § 44-14-361.1(b)

How to Read Your Score

The passing threshold is 70% — 35 correct out of 50. On your first practice attempt, treat your score as a diagnostic, not a verdict. A first attempt tells you which of the 9 topic areas need attention, not whether you are capable of passing.

A score below 60% on your first try is normal, especially for candidates who have not yet studied the NASCLA Contractors Guide systematically. Use the topic-by-topic breakdown to find your weakest areas. A candidate who scores 85% on Contracts but 40% on Tax Laws has a clear next step.

Be honest with yourself about a score in the 65–72% range: that band is a warning, not a pass. On a 50-question exam, the margin between passing and failing is only 3 to 4 questions. Variability in which questions appear means a borderline practice score is not a safe cushion. Aim for 80%+ on full practice exams before scheduling the real test.

Use each retake of the full practice exam — which pulls from a pool of 245+ questions — to confirm that your improvement generalizes across the topic pool, not just the specific questions you happened to see before.

Where Candidates Lose Points

Labor burden vs. overhead confusion. Bidding questions that mention employer costs often use all four terms — labor burden, project overhead, company overhead, and markup — as answer choices. Candidates who have not internalized the definition of each consistently pick the wrong one.

Lien law deadlines. The 90-day filing window, the parties who qualify to file, and the priority rules under Georgia lien law are tested directly. Many candidates know that liens exist but cannot recall the specific timeframes when the question demands a number.

Financial ratios. The quick ratio, liquidity ratio, and debt ratio each have their own formula. Candidates who blur these formulas or confuse numerator and denominator lose points that could have been secured with two hours of focused review.

The $100,000 one-day payroll rule. Tax questions on deposit schedules have multiple plausible numbers as distractors. Candidates who confuse the one-day rule threshold with regular deposit schedule amounts miss these.

OSHA form numbers. The exam expects you to match the right form — 300, 300A, or 301 — to the right function. Transposing 300 and 300A (the log vs. the annual summary) is an extremely common error.

Running long on calculations. The Estimating and Bidding section (7 items) and the Business Organization section (7 items) together make up 28% of the exam. Multi-step calculation questions take more time than recall questions. Candidates who don't pace themselves sometimes rush the final 10 questions.

Exam Quick Facts