C33 Business Organization 5

Question 1

Which event would cause a California painting contractor's license to be automatically suspended without a CSLB hearing?

Accepted Answer

Allowing the required contractor's bond to lapse or be cancelled

Answer

California law automatically suspends a contractor's license the moment the required $25,000 contractor's bond lapses, with no hearing required.

Question 2

When the partners of a painting contracting partnership dissolve the entity, how should outstanding construction contracts be handled?

Accepted Answer

A licensed successor entity or a licensed partner may complete existing contracts

Answer

Outstanding contracts can be completed by a properly licensed successor entity or by a partner who holds their own valid license, ensuring project continuity.

Question 3

What is the minimum combined labor-and-materials threshold above which performing work without a California contractor's license is illegal?

Accepted Answer

$500 in combined labor and materials

Answer

Under California Business and Professions Code §7048, any project with combined labor and materials exceeding $500 requires a contractor's license.

Question 4

A C33 license holder wants to operate two entirely separate painting companies simultaneously. How may they legally accomplish this?

Accepted Answer

Qualify both companies using a separate, eligible qualifying individual for each entity

Answer

Each business entity must have its own qualifying individual; using different QIs for each company allows the owner to operate both legally.

Question 5

What does 'piercing the corporate veil' mean in the context of a painting contractor corporation?

Accepted Answer

A court holding corporate owners personally liable because they failed to maintain proper corporate formalities

Answer

Courts can pierce the corporate veil and hold owners personally liable when the corporation is used as an alter ego or corporate formalities—like separate finances—are ignored.

C33 - C-33 California Painting Contractor License Practice Test

C33 - C-33 California Painting Contractor License Practice Test

C33 Business Organization 5