A qualifying individual for a corporation holding a B-General Building Contractor license must post a bond in what amount according to California regulations?
Correct Answer
A) $12,500
Under Business and Professions Code Section 7071.6, the qualifying individual for a corporation or partnership must post a separate bond of $12,500. This is in addition to the $25,000 contractor license bond and ensures the qualifying individual's personal responsibility for the entity's compliance with licensing laws.
Why This Is the Correct Answer
Under B&P Code Section 7071.6, qualifying individuals (RMOs or RMEs) for corporations or partnerships are required to post a separate bond of $12,500. This bond is distinct from the $25,000 contractor license bond required of the business entity itself. The qualifying individual bond holds the RMO or RME personally financially accountable for compliance with licensing laws, creating a dual-bond structure: the company posts $25,000 and its qualifier posts $12,500, for a combined $37,500 in consumer protection.
Why the Other Options Are Wrong
Option B: $25,000
$25,000 is the amount of the contractor license bond required of the business entity (the corporation or partnership), not the qualifying individual. Candidates commonly confuse these two bond amounts. The entity bond and the qualifying individual bond are separate instruments with separate amounts and separate purposes.
Option C: $15,000
$15,000 is not a bond amount established by B&P Code Section 7071.6. This is a distracting figure that falls between the qualifier bond ($12,500) and the license bond ($25,000). No standard CSLB bond is set at $15,000.
Option D: $10,000
$10,000 is not the correct qualifying individual bond amount under current California law. This figure may reflect an outdated bond amount from earlier versions of the B&P Code. The current statutory amount is $12,500.
Memory Technique
Two bonds, two amounts: Company bond = $25,000 (the full amount). Qualifier bond = $12,500 (exactly half the company bond). Remember: the qualifier is personally on the hook for half.
More law-business Questions
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Which of the following activities is exempt from California contractor licensing requirements under Business and Professions Code Section 7048?
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