Free LAW AND BUSINESS MANAGEMENT EXAMINATION (Mississippi Contractors) Practice Questions

Sample Practice Questions

Try these 10 sample questions from the LAW AND BUSINESS MANAGEMENT EXAMINATION (Mississippi Contractors) 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.$50,000Correct answer: C
   4. D.$100,000

   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 unopenedCorrect answer: B
   3. C.It is accepted with a 24-hour cure period
   4. D.It is held until the contractor pays a fee

   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 liensCorrect answer: B
   3. C.A mechanic’s lien against the owner
   4. D.A supplier’s credit application

   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.100Correct answer: C
   4. D.250

   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 percentCorrect answer: B
   3. C.5 percent
   4. D.7 percent

   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 daysCorrect answer: C
   4. D.At the first pay application

   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 requiredCorrect answer: C
   4. D.No, consent of the surety alone is required

   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 LLCsCorrect answer: B
   3. C.Only sole proprietorships
   4. D.Only foreign partnerships

   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.$1,000,000Correct answer: C
   4. D.$2,000,000

   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 employerCorrect answer: B
    3. C.Only an OSHA compliance officer
    4. D.The project owner’s accountant

    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)