TN Business and Law Practice Questions - Tennessee Contractor Business and Law Examination Exam - TN Business and Law Practice Questions - Tennessee Contractor Business and Law Examination Exam

Question 1

A Tennessee contractor operates as a sole proprietorship with no separate legal entity. Which statement best describes the owner's personal liability for business debts and job-site claims?

The owner is liable only up to the contractor license monetary limit The owner has unlimited personal liability for the business's debts and obligations Personal assets are automatically shielded once a Board license is issued Liability is limited to the amount of the general liability policy deductible

Correct Answer:

The owner has unlimited personal liability for the business's debts and obligations

Question 2

Which governing document typically sets internal ownership, voting, and management rules for a Tennessee limited liability company?

Corporate bylaws filed with the Tennessee Secretary of State An operating agreement among the members The Contractor's Affidavit submitted to the Board A NASCLA project manual

Correct Answer:

An operating agreement among the members

Question 3

Why do many small Tennessee contractors elect S corporation or LLC tax treatment instead of remaining a C corporation?

C corporations are prohibited from holding a Board contractor license A C corporation's profits are generally taxed at the entity level and again when distributed as dividends Only C corporations must obtain a federal employer identification number S corporations and LLCs are exempt from Tennessee business tax

Correct Answer:

A C corporation's profits are generally taxed at the entity level and again when distributed as dividends

Question 4

Under Rule 0680-01-.02, who may serve as the qualifying agent for a Tennessee corporation seeking a contractor license?

Any shareholder, regardless of ownership percentage, without further paperwork Only the corporation's outside attorney A major stockholder owning at least 20 percent of the stock, or a full-time employee with written power of attorney to bind the corporation Any part-time bookkeeper who has sat for the Business and Law exam

Correct Answer:

A major stockholder owning at least 20 percent of the stock, or a full-time employee with written power of attorney to bind the corporation

Question 5

A Tennessee LLC's qualifying agent resigns. Under Rule 0680-01-.02, what must the company do?

Notify the Board within 10 days and appoint a new qualifying agent who takes the examination within 3 months, or the license becomes inactive Continue bidding for 12 months under the departed agent's exam scores File only an amended Secretary of State annual report; no Board notice is required Automatically convert to a sole proprietorship license in the remaining member's name

Correct Answer:

Notify the Board within 10 days and appoint a new qualifying agent who takes the examination within 3 months, or the license becomes inactive

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About this Exam

Prepare with the TN Business and Law Practice Questions - Tennessee Contractor Business and Law Examination Exam practice quiz. This question bank includes 100 questions covering tennessee, contractor, cost, contract, and rule. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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TN Business and Law Practice Questions - Tennessee Contractor Business and Law Examination Exam

This practice set contains 100 questions from the matching question bank and focuses on tennessee, contractor, cost, contract, and rule. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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TN Business and Law Practice Questions - Tennessee Contractor Business and Law Examination Exam

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