CSLB Contractor's Law & Business Practice Exam

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Prepare for the CSLB Contractor's Law and Business Exam. Use flashcards and multiple choice questions, each with hints and explanations. Enhance your exam readiness!

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Is it acceptable for Bob Smith to operate his own construction business while being the RME for XYZ Construction Co.?

Yes, he can qualify multiple licenses.
Yes, provided he is actively involved at least 32 hours per week.
No, he must obtain another qualifying exam.
No, he can only qualify XYZ Co.'s license.

The correct answer is: No, he can only qualify XYZ Co.'s license.

In the context of contractor licensing, a Responsible Managing Employee (RME) can only qualify one contractor's license at a time. When Bob Smith is serving as the RME for XYZ Construction Co., he is effectively the person responsible for the company's compliance with licensing laws and regulations. This role requires his full attention and engagement with that specific business. Bob operating his own construction business while also qualifying for XYZ Construction Co.'s license poses a conflict in terms of accountability and oversight. Since the RME is expected to be directly involved in managing the operations of the contractor's business for which they are responsible, managing two businesses simultaneously could lead to issues with compliance and effective management. Therefore, he can only qualify XYZ Co.'s license and cannot also run his own construction business in that capacity.