Under B&P Code Section 7071.17, what happens to a contractor's license when the qualifying individual disassociates from the business?
Correct Answer
A) License becomes inactive pending replacement
B&P Code Section 7071.17 provides that when a qualifying individual disassociates, the license becomes inactive until a replacement qualifying individual is approved.
Why This Is the Correct Answer
License becomes inactive pending replacement is correct. B&P Code Section 7071.17 specifies that when the qualifying individual (RMO or RME) disassociates from the licensee, the license automatically becomes inactive. It remains in that inactive state until a replacement qualifying individual is approved by the CSLB, ensuring that active licenses always have a qualified person responsible for the work.
Why the Other Options Are Wrong
Option B: License remains valid for 90 days
License remains valid for 90 days is incorrect. There is no 90-day grace period during which the license stays valid after a qualifying individual disassociates. The license becomes inactive immediately upon disassociation, not after a 90-day window.
Option C: License transfers to senior employee
License transfers to senior employee is incorrect. A contractor's license cannot automatically transfer to any employee, regardless of seniority or experience. A new qualifying individual must be properly qualified and approved by the CSLB through the formal application process.
Option D: License is immediately suspended
License is immediately suspended is incorrect. The license does not go into 'suspension' (which implies disciplinary action) — it becomes 'inactive.' These are distinct status classifications. Inactive status occurs administratively and can be resolved by obtaining a new qualifying individual; suspension is a disciplinary measure.
Memory Technique
Qualifying individual leaves = license goes to sleep (inactive). It wakes up only when a new qualified person steps in and is approved by CSLB. No qualifier = no active license.
More California Questions
A Class C-10 electrical contractor has annual gross receipts of $3.2 million. What is the required bond amount under current California law?
Under B&P Code Section 7125.4, what is the fee for initial Home Improvement Salesperson registration?
According to B&P Code Section 7125, what is the maximum penalty the CSLB can impose for contracting without a license?
A home improvement contract for $8,500 requires a 3-day right to cancel notice. The contract is signed on Tuesday at 2 PM. When does the cancellation period expire?
A contractor employs 15 workers across multiple job sites. The total annual payroll is $850,000 with a workers' comp rate of 4.1%. If they self-insure with a deposit requirement of 125% of estimated annual premium, what deposit is required?
A C-10 electrical contractor wants to perform plumbing work valued at $8,000 as part of a larger electrical project. Is this permissible under CSLB regulations?
A homeowner discovers that an unlicensed contractor performed $25,000 worth of work on their property. Under B&P Code Section 7031, what remedy is available to the homeowner?
A Class B general building contractor wants to perform electrical work valued at $750. According to the B&P Code, this contractor:
A contractor's qualifying individual leaves the company. How many days does the contractor have to replace them before the license becomes invalid?
According to B&P Code Section 7031, what happens to a contractor's right to payment if they perform work while unlicensed?
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 C-20 warm air heating contractor discovers asbestos while installing ductwork in a 1960s home. The homeowner asks the contractor to remove it. What should the contractor do?
Next Question
Calculate the total licensing fees for a new Class B general building contractor applying for an original license, including the application fee, initial license fee, and required bond cost for a $100,000 bond through a surety company at 1.5% annual premium.