When a qualifying individual disassociates from a California contracting business, what is the maximum time period the business can continue operating before becoming inactive?
Correct Answer
D) 90 days
Under California Code of Regulations Section 823, when a qualifying individual disassociates from a contracting business, the license becomes inactive after 90 days unless a replacement qualifying individual is approved by the CSLB within that timeframe.
Why This Is the Correct Answer
Under California Code of Regulations Section 823 and Business and Professions Code Section 7068.1, a contracting business has 90 days to replace a qualifying individual after disassociation. During this window, the license technically remains active but the contractor is restricted from entering new contracts or pulling permits. If no replacement is approved within 90 days, the license becomes inactive.
Why the Other Options Are Wrong
Option A: 60 days
60 days is not the correct grace period. It is a plausible distractor, but the law specifically allows 90 days. Choosing 60 days underestimates the time the legislature granted for business continuity.
Option B: 120 days
120 days is too long. The law grants 90 days, not 120. Selecting 120 days overestimates the grace period and could lead a contractor to believe they have more time than they actually do.
Option C: 30 days
30 days is the shortest option and is far too brief. Some candidates associate 30-day windows with other notification requirements in contractor law, but the qualifying individual replacement period is specifically 90 days.
Memory Technique
Associate '90 days' with a season — roughly one quarter of the year. Think: 'A qualifying individual leaves, you have one quarter (90 days) to find a replacement before the business goes on the bench (inactive).'
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