Free LAW AND BUSINESS MANAGEMENT EXAMINATION Practice Questions

Sample Practice Questions

Try these 10 sample questions from the LAW AND BUSINESS MANAGEMENT EXAMINATION practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A Mississippi commercial contractor applies for a major classification. What minimum net worth must its reviewed financial statement show?

   1. A. $10,000
   2. B. $20,000
   3. C. $50,000
   4. D. $100,000

   Answer: C

   Explanation: The financial rule says major-classification assets must include net worth "of at least Fifty Thousand Dollars (50,000.00)."

   Reference: Msboc Commercial Rules — Title 30, Part 802, Rule 1.1(2)(i)

2. 2On a Mississippi public project of $50,000 or more, what happens to a bid from a contractor lacking the required certificate?

   1. A. It is opened but scored nonresponsive
   2. B. It is returned unopened
   3. C. It is accepted with a 24-hour cure period
   4. D. It is held until the contractor pays a fee

   Answer: B

   Explanation: The public-procurement rule directs agencies to "return, unopened, any bids" submitted by a contractor lacking the required certificate.

   Reference: Msboc Commercial Rules — Title 30, Part 802, Rule 1.2(1)

3. 3Before final payment on a Mississippi DFA project becomes due, which lien-related document must the contractor submit?

   1. A. A preliminary notice of intent to bid
   2. B. A contractor’s affidavit of release of liens
   3. C. A mechanic’s lien against the owner
   4. D. A supplier’s credit application

   Answer: B

   Explanation: Division 0 §9.10.2 lists the "Contractor’s affidavit of release of liens" among the conditions before final payment becomes due.

   Reference: Dfa Division 0 (2025) — Division 0, Supplementary Conditions §9.10.2

4. 4A service sells for $500 and has $300 of variable cost per job. With $20,000 fixed costs, how many jobs are needed to break even?

   1. A. 40
   2. B. 67
   3. C. 100
   4. D. 250

   Answer: C

   Explanation: SBA gives "Break-even point (units) = fixed costs ÷ (sales price per unit – variable cost per unit)." Thus $20,000 ÷ $200 = 100 jobs.

   Reference: Break-even point | U.S. Small Business Administration — Break-even point analysis — formula

5. 5What Mississippi contractor’s tax rate generally applies to nonresidential construction contracts over $10,000?

   1. A. 1.5 percent
   2. B. 3.5 percent
   3. C. 5 percent
   4. D. 7 percent

   Answer: B

   Explanation: DOR says the Sales Tax Law "levies a 3.5% contractor's tax on all non-residential construction activities" above the stated threshold.

   Reference: Guide for Construction Contractors | Mississippi Department of Revenue — Miss. Code § 27-65-21; Guide for Construction Contractors, introductory summary paragraph

6. 6On a Mississippi DFA project, by when must the contractor submit its construction schedule after the Notice to Proceed date?

   1. A. Within five days
   2. B. Within ten days
   3. C. No later than fifteen days
   4. D. At the first pay application

   Answer: C

   Explanation: Division 0 §3.10.1 requires submission "no later than fifteen days after the date established in the Notice to Proceed."

   Reference: Dfa Division 0 (2025) — Division 0, Supplementary Conditions §3.10.1

7. 7May a Mississippi DFA contractor assign, sublet, or transfer its interest in the agreement without owner consent?

   1. A. Yes, after substantial completion
   2. B. Yes, to any licensed contractor
   3. C. No, written consent of the Owner is required
   4. D. No, consent of the surety alone is required

   Answer: C

   Explanation: The standard agreement says the contractor "will not assign, sublet, or transfer the interest in this Contract agreement without the written consent of the Owner."

   Reference: Dfa Division 0 (2025) — Division 0, Standard Form of Agreement §5.2.1

8. 8Which Mississippi business entities are required by the Secretary of State to file annual reports?

   1. A. Only nonprofit corporations
   2. B. For-profit corporations, nonprofit corporations, and LLCs
   3. C. Only sole proprietorships
   4. D. Only foreign partnerships

   Answer: B

   Explanation: The Secretary of State says "all for profit corporations, nonprofit corporations, and limited liability companies operating in Mississippi are required to file an Annual Report."

   Reference: Annual Reports | MS SOS — § Annual Reports, introductory filing-requirement paragraph

9. 9What aggregate excess-liability umbrella limit does Mississippi DFA Division 0 specify for a project over $500,000?

   1. A. $250,000
   2. B. $500,000
   3. C. $1,000,000
   4. D. $2,000,000

   Answer: C

   Explanation: Division 0 lists "EXCESS LIABILITY: (Umbrella on projects over $500,000)" at a $1,000,000 aggregate.

   Reference: Dfa Division 0 (2025) — Division 0, Insurance and Bonds, excess liability clause

10. 10Who must conduct the frequent and regular jobsite inspections required by OSHA’s construction accident-prevention rule?

    1. A. Any available employee
    2. B. A competent person designated by the employer
    3. C. Only an OSHA compliance officer
    4. D. The project owner’s accountant

    Answer: B

    Explanation: OSHA §1926.20(b)(2) requires inspections by "competent persons designated by the employers."

    Reference: 1926.20 - General safety and health provisions. | Occupational Safety and Health Administration — 29 CFR 1926.20(b)(2)