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Nevada Law & Business Details - License & Qualifier

Nevada Law & Business Details - License & Qualifier

Nevada Business & Law — Section 1: Licensing & Qualifier

Use your NASCLA Contractor’s Guide — Nevada Edition. This is an open-book exam. Tab and highlight the items below for fast look-ups during the test. Where you see “Mark page(s),” put a sticky tab and highlight the exact paragraph, definition, or timeline box in your book.

1) Core Definitions & Roles Mark pages in NASCLA

Licensee vs. Qualifying Individual (QI)

  • Licensee (entity): The company that holds the Nevada contractor’s license and is legally responsible for all work under that license.
  • Qualifying Individual: The single person who proves experience, passes exams, and provides direct supervision and control over construction operations.

Monetary Limit & Classification

  • Monetary Limit: Maximum contract size the Board authorizes based on financials.
  • Classification: The trade(s) or scope(s) you’re allowed to perform (e.g., B-General, C-2 Electrical). Work must match the classification.
  • Mark pages: The sections defining contractor, qualifying individual, classification, and monetary limit. Highlight sentences that state “who is responsible for what.”
2) Qualifier Experience & Exam Experience proof & PSI
  • Experience Standard: Minimum years in the last 10 (journeyman/foreman/contractor/supervisor roles). Keep W-2/1099s, permits, contracts, affidavits, and detailed project lists.
  • Exams: Business & Law (this course) and, when required, trade exam(s) through PSI.
  • Cross-qualifying: A QI may qualify multiple entities only under specific Board conditions (e.g., ownership/engagement thresholds).
3) License Application & Issuance What the Board reviews

Application package

  • Entity details (LLC/Corp/Partnership/Sole Prop)
  • QI experience & exam eligibility
  • Financials (used to set monetary limit)
  • Bond & insurance (GL, WC)
  • Background disclosures

Monetary Limit

  • Set by the Board using financial criteria
  • Can be raised later with stronger financials
  • Exceeding the limit risks discipline
4) License Maintenance & Change Notices Deadlines to memorize
Change/EventActionWhy it matters
Address/Contact infoNotify Board within stated timeframeBoard must reach the entity; failure can trigger issues
Ownership/ControlReport material changes; Board may reevaluate licenseProtects public and ensures responsible control
QI disassociationMandatory notice; replacement required within allowed periodLicense may be suspended/restricted if not replaced
Name/DBAUse licensed name/DBA on contracts & ads; notify Board of changesMisrepresentation can lead to discipline
RenewalsTrack renewal cycle (commonly 2 years)Avoid lapse or late penalties
5) Classification Scope & Advertising Rules Stay in bounds
  • Scope of Work: Perform only work authorized by the classification(s). Add classifications as needed or subcontract to properly licensed subs.
  • Advertising: Include Nevada license number on ads (websites, cards, vehicles per rule). Omission may result in citations.
6) Enforcement & Common Pitfalls Discipline triggers

Frequent Violations

  • Unlicensed contracting or aiding/abetting unlicensed activity
  • Exceeding monetary limit
  • Working outside classification scope
  • Failing to notify Board of QI/ownership changes
  • Advertising without license number

Best Practices

  • Keep a compliance calendar (renewals, notice deadlines)
  • Standardize contract & ad templates with the license number
  • Quarterly review of classification scopes and active projects
  • Document the QI’s supervision and management role

Practice Exam — 60 Questions Answers & brief explanations under each

1. The qualifying individual (QI) is primarily responsible for:

  1. Bid protests
  2. Direct supervision and control of operations
  3. Payroll taxes
  4. City licensing
Answer

B — QI = supervision/control of construction operations.

2. Nevada contractor licenses are most commonly renewed every:

  1. 6 months
  2. 1 year
  3. 2 years
  4. 3 years
Answer

C — Typical renewal cycle is two years.

3. Who sets the monetary limit?

  1. The QI
  2. The surety
  3. The Board, based on financials
  4. The building department
Answer

C — Board reviews financial capacity.

4. Changing business address requires Board notification:

  1. Only at renewal
  2. Within the specified timeframe
  3. Only for corporations
  4. Optional
Answer

B — Mark exact days in your NASCLA book.

5. QI experience generally requires:

  1. Two years
  2. Four years within last ten
  3. Ten years
  4. No experience
Answer

B — Four years typical; verify exact language.

6. Advertising must include:

  1. Bond number
  2. License number
  3. Tax ID
  4. Subcontractor names
Answer

B — License # is required on ads.

7. Classifications authorize:

  1. Any construction
  2. Only defined scopes
  3. Engineering practice
  4. No permits
Answer

B — Stay within scope or add classifications.

8. Who can be a QI?

  1. Any employee
  2. Corporate secretary only
  3. Individual who meets experience/exam criteria
  4. Surety agent
Answer

C — Must meet Nevada requirements.

9. QI must demonstrate:

  1. 100% ownership
  2. Active engagement/supervision
  3. Daily site presence
  4. CPA license
Answer

B — QI supervises/controls operations.

10. Adding a new classification usually requires:

  1. Fee only
  2. Experience proof and any required trade exam
  3. Waiting for renewal
  4. Closing license
Answer

B — Experience + exam as applicable.

11. Monetary limits reflect:

  1. Geography
  2. Financial capacity
  3. Project type
  4. Owner preference
Answer

B — Based on financial review.

12. When the QI disassociates, the licensee must:

  1. Do nothing
  2. Notify Board within the set period
  3. Tell the city only
  4. Change logo
Answer

B — Report and replace within the allowed window.

13. If QI isn’t replaced timely:

  1. No effect
  2. Possible suspension/restriction
  3. Limit increases
  4. Automatic bond void
Answer

B — Board may discipline.

14. Using a new DBA requires:

  1. Nothing
  2. Compliance with Board DBA rules/notification
  3. City notice only
  4. Bank approval
Answer

B — Names must match licensed records.

15. Not typically part of application:

  1. Financials
  2. Experience proof
  3. Union membership
  4. Background disclosures
Answer

C — Union membership isn’t a standard requirement.

16. QI qualifying multiple entities is allowed:

  1. Always
  2. Never
  3. Only under Board conditions (e.g., ownership/engagement)
  4. Only for public works
Answer

C — Limited circumstances; see NASCLA.

17. Unlicensed contracting can lead to:

  1. No penalty
  2. Fines and/or criminal penalties
  3. City warning only
  4. Bond increase
Answer

B — Enforced by Nevada.

18. To raise monetary limit:

  1. Phone request
  2. Stronger financials + Board approval
  3. Change entity
  4. Replace QI
Answer

B — Submit updated financial support.

19. Classification scope:

  1. Advisory
  2. Defines legal work allowed
  3. Public jobs only
  4. City-defined only
Answer

B — Binding scope of work.

20. Converting LLC→Corp requires:

  1. No action
  2. Board notification/documentation
  3. IRS only
  4. City only
Answer

B — Report entity change.

21. Best experience evidence:

  1. Reference letter
  2. W-2/1099s + permits/contracts + project list
  3. Business card
  4. Brochure
Answer

B — Objective documentation.

22. License number must appear on:

  1. Tools
  2. Required advertising
  3. Tax forms
  4. Blueprint title blocks
Answer

B — Ads require license #.

23. Who is legally responsible for the work?

  1. QI personally
  2. Licensed entity
  3. Surety
  4. Owner
Answer

B — The entity holds the license.

24. Ownership change impacting control:

  1. No action
  2. Notify Board; possible reevaluation
  3. City only
  4. Bank only
Answer

B — Material control changes are reported.

25. Monetary limit restricts:

  1. Employees
  2. Max contract size
  3. Classifications count
  4. Public bids only
Answer

B — Contract size cap.

26. Direct supervision is shown by:

  1. Selfies
  2. Role + oversight + decision authority
  3. Tool list
  4. Vendor letters
Answer

B — Management involvement.

27. Requires Board action:

  1. New logo
  2. Adding classification
  3. Buying equipment
  4. Hiring sub
Answer

B — New class needs Board process.

28. Application delay/denial if:

  1. PO Box used
  2. Multiple phone numbers
  3. Incomplete financials/disclosures
  4. Blue branding
Answer

C — Completeness matters.

29. Multiple classifications:

  1. No added experience ever
  2. Each class has its own requirements
  3. Only one allowed
  4. Randomly assigned
Answer

B — Distinct requirements.

30. Aiding unlicensed activity means:

  1. Helping a licensed peer
  2. Letting unlicensed party operate under your license
  3. Teaching
  4. Paying prevailing wage
Answer

B — Don’t allow illegal use.

31. Contract name should:

  1. Be any nickname
  2. Match licensed name/DBA on file
  3. Exclude license #
  4. Use sub’s name
Answer

B — Consistency is required.

32. If QI fails exam:

  1. Auto-approve
  2. Retest per PSI rules
  3. Delegate to supplier
  4. Convert to city license
Answer

B — Retest allowed.

33. New background disclosure likely needed for:

  1. New logo
  2. Material control/ownership change
  3. Hosting change
  4. New truck
Answer

B — Control changes matter.

34. City business license:

  1. Replaces state license
  2. Is separate; doesn’t substitute for contractor license
  3. Optional
  4. Grants unlimited scope
Answer

B — Local license is separate.

35. Inactive status requires:

  1. Nothing
  2. No active projects + Board procedure
  3. Employee vote
  4. Bank letter
Answer

B — See NASCLA procedures.

36. Financial statements are used to:

  1. Set/raise monetary limits
  2. Replace taxes
  3. Eliminate bonds
  4. Remove exams
Answer

A — Board evaluates capacity.

37. Journeyman/foreman/contractor/supervisor roles relate to:

  1. Safety only
  2. Acceptable QI experience
  3. Lien claimants
  4. Prevailing wage
Answer

B — Common experience paths.

38. Ad omits license #:

  1. No issue
  2. Possible citation/discipline
  3. Auto-revocation
  4. Agency fined only
Answer

B — Noncompliance risk.

39. An RME QI must be:

  1. Owner
  2. Employed & exercising supervision/control
  3. CPR certified
  4. Architect
Answer

B — Active engagement.

40. Entity change (SP→LLC) requires:

  1. Nothing
  2. Board notification per rule
  3. Logo change
  4. City notice only
Answer

B — Report entity change.

41. Exam format for QI:

  1. Oral
  2. PSI computer-based
  3. Mail
  4. Optional
Answer

B — PSI administers.

42. Maintain good standing by:

  1. Annual new exam
  2. Timely renewal + compliance
  3. Monthly city inspection
  4. IRS pre-approval
Answer

B — Renewal/compliance.

43. Exceeding monetary limit can cause:

  1. No issue
  2. Discipline
  3. Auto-increase
  4. Owner waiver
Answer

B — Violates license limitations.

44. DBA on contracts must:

  1. Be unregistered
  2. Match Board records
  3. Be different each job
  4. Use sub’s DBA
Answer

B — Names must match.

45. Strongest proof of 4 years experience:

  1. Photos
  2. W-2/1099 + permits/contracts + project list
  3. Business card
  4. Posters
Answer

B — Objective evidence.

46. “Direct supervision” means:

  1. Only payroll
  2. Controlling construction operations
  3. Owning surety
  4. Jobsite selfies
Answer

B — Operations control.

47. Outside your classification:

  1. Perform anyway
  2. Sub to properly licensed contractor
  3. Skip permits
  4. Bill under another license
Answer

B — Or add the class.

48. License denial reason:

  1. No truck
  2. Home office
  3. Not meeting experience/financial responsibility
  4. PO Box
Answer

C — Responsibility standards.

49. RME/RMO resignation requires:

  1. No action
  2. Timely Board notice + replacement
  3. Owner letter only
  4. City transfer
Answer

B — Replacement window.

50. Board’s role includes:

  1. Plan check
  2. Licensing, limits, enforcement
  3. Issuing occupancy
  4. Setting NEC
Answer

B — Regulates contractors.

51. Event likely needing new QI:

  1. New paint
  2. QI retires
  3. Forklift purchase
  4. Font change
Answer

B — Replace the qualifier.

52. Aiding unlicensed practice:

  1. Hire licensed sub
  2. Allow unlicensed party to operate under your license
  3. Post job ad
  4. Buy materials
Answer

B — Prohibited.

53. QI must be:

  1. Passive investor
  2. Actively engaged
  3. Supplier
  4. Inspector
Answer

B — Active management.

54. Renewal requires:

  1. New exam
  2. Timely forms/fees
  3. City inspection
  4. New entity
Answer

B — Renew on time.

55. Unregistered DBA on contracts may cause:

  1. No effect
  2. Discipline
  3. Limit increase
  4. Bank fee only
Answer

B — Misrepresentation risk.

56. Responsible licensee maintains:

  1. No job files
  2. Records, insurance/bonding, compliance
  3. Website only
  4. Weekly parties
Answer

B — Demonstrates responsibility.

57. Classification scope language found in:

  1. Social media
  2. NASCLA + Board descriptions
  3. Safety manual only
  4. City planning
Answer

B — Reference & Board.

58. Misrepresenting experience:

  1. No issue
  2. Grounds for denial/discipline
  3. Limit increase
  4. PSI corrects it
Answer

B — Serious violation.

59. License law purpose:

  1. Trends
  2. Protect public health/safety/welfare
  3. Guarantee profits
  4. Control unions
Answer

B — Public protection.

60. Unsure if a scope is allowed:

  1. Proceed
  2. Verify w/Board or add classification
  3. Owner waiver
  4. Bill under other license
Answer

B — Confirm or add the class.

Next: Section 2 — Financial Management, Bonds & Insurance →