Under Arizona ROC regulations, what happens to a contractor's license when the qualifying party leaves the company?
Correct Answer
C) License becomes inactive until new qualifying party is approved
When a qualifying party leaves, the license becomes inactive until a new qualifying party is approved by ROC.
Why This Is the Correct Answer
When the qualifying party (QP) departs, the contractor's license automatically becomes inactive. The company cannot operate under that license until a new qualifying party is approved by the ROC. This protects the public by ensuring a licensed individual is always responsible for the work.
Why the Other Options Are Wrong
Option A: License remains valid for 180 days
There is no 180-day grace period for a license after the qualifying party leaves. Arizona ROC regulations do not provide an extended operational window of 180 days for companies in this situation.
Option B: License is immediately suspended
The license is not immediately suspended in the punitive sense — it becomes inactive, which is a different status. Immediate suspension implies a disciplinary action, whereas inactive status simply means the license cannot be used until a new QP is approved.
Option D: License remains valid for 90 days
There is no 90-day grace period either. While some candidates recall that there may be a window to find a new QP, the license itself becomes inactive immediately upon the QP's departure — the 90-day figure is not accurate under ROC regulations.
Memory Technique
Think of the QP as the 'key' that keeps the license 'active.' When the key leaves, the license locks (goes inactive) immediately. There's no spare key sitting around for 90 or 180 days — you need a new key (new QP) approved by ROC to unlock it again.
More Arizona Questions
What is the current minimum bond amount required for a residential contractor license in Arizona?
A contractor files a preliminary 20-day notice on January 15th for work that began on January 10th. The preliminary notice was delivered to the owner on January 18th. Under A.R.S. 33-981, is this notice valid for lien purposes?
Under Arizona law, which entity has the authority to investigate complaints against licensed contractors and impose disciplinary actions?
Under Arizona ROC regulations, what is the maximum amount a residential contractor can collect as a down payment before beginning work?
A contractor's license expires on June 30th. The contractor submits a renewal application on July 15th. Under Arizona ROC regulations, what penalty applies?
A contractor's workers compensation policy lapses for 15 days due to non-payment of premiums. Three employees are injured during this period, resulting in $85,000 in medical costs. Under Arizona law, what is the contractor's potential liability?
According to A.R.S. Title 32, which of the following can serve as a qualifying party for multiple contracting businesses?
A residential contractor enters into a contract for $15,000 to remodel a kitchen. Under Arizona law, what is the required down payment limitation?
A residential contractor completed $45,000 in work and materials. The homeowner paid $35,000 but disputes the remaining $10,000. How long does the contractor have to file a mechanics lien after recording the notice of completion?
A contractor has 8 employees working on various projects. The annual workers' compensation premium is $24,000. If the contractor fails to maintain coverage, what is the maximum daily penalty exposure?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A contractor has 12 employees and an annual payroll of $480,000. If 4 employees work in office administration (rate: $0.35 per $100) with $120,000 payroll, and 8 work in construction (rate: $8.50 per $100) with $360,000 payroll, what is the total workers compensation premium?
Next Question
A contractor has 3 full-time employees with an annual payroll of $120,000. What is the approximate annual workers' compensation insurance premium at a rate of $8.50 per $100 of payroll?