Anyone applying for a North Carolina general contractor license has to clear the Business and Law exam, separate from the trade knowledge exam. Here is the format, straight from the statutes and the Licensing Board’s own exam rules.
How many questions are on the North Carolina Business and Law exam?
The exam has 40 scored multiple-choice questions, each with one best answer, and you have 90 minutes to finish. It is administered by PSI Examination Services on behalf of the North Carolina Licensing Board for General Contractors (NCLBGC).
This is a proficiency test scored on its own. Passing the trade exam for your classification does not exempt you from also passing Business and Law.
What score do you need to pass?
You need 70 percent correct, which is 28 of the 40 questions. There is no partial credit and no separate mandatory section within Business and Law itself, so every correct answer counts the same toward the 28-question target.
Is the exam open book?
Yes, and this changes how you should prepare. You are allowed to bring the approved bound references into the test:
- The NASCLA Contractor’s Guide to Business, Law and Project Management (North Carolina edition)
- The NC Excavation Safety Guidelines, 2022 edition or later
- The NC sedimentation-control rules
Only permanent tabs are allowed in those references, with no adhesive flags and no handwritten notes written on the tabs themselves. A silent, non-programmable calculator is permitted. Because the exam is open book, the practical skill being tested is less “memorize every rule” and more “know exactly where each rule lives so you can find it inside 90 minutes.”
What topics are on the exam?
The 40 questions are drawn from five subject areas, weighted toward licensing law:
- Licensing and the Board (21 questions): who must be licensed under NCGS Chapter 87, license classifications and their monetary limits, applications, exams, renewals, discipline, and penalties for unlicensed contracting.
- Liens and Bonds (8 questions): mechanics’ and materialmen’s liens on real property under NCGS Chapter 44A, the lien agent, subrogation liens, and payment and performance bonds.
- One Call and Underground Utilities (5 questions): the Underground Utility Safety and Damage Prevention Act, covering locate notices, marking colors, the tolerance zone, and damage reporting.
- Erosion and Sedimentation Control (3 questions): the Sedimentation Pollution Control Act of 1973, covering erosion control plans and ground-cover and buffer standards.
- Subcontractor’s Pay Requirements (3 questions): North Carolina’s interim and prompt payment rules for paying subcontractors on private and public projects.
Licensing alone makes up more than half the exam, so it is worth the most study time, but the four smaller categories together are 16 questions, enough to decide whether you clear 28.
One number worth knowing before you sit
A general contractor license is required in North Carolina once a project’s cost reaches $40,000 or more. That threshold was raised from $30,000, effective 1 October 2023. A separate rule, the requirement to designate a lien agent, still kicks in at $30,000. Exams built on outdated study material sometimes still use the old $30,000 licensing figure, so check that whatever you study reflects the current threshold.
How much does the exam cost, and how do retakes work?
Each attempt costs $79, paid to PSI. If you do not pass, you may retake the exam as many times as needed within 12 months of your eligibility. Your eligibility letter itself is only valid for 120 days, so plan your first attempt, and any retake, inside that window.
What is the format at a glance?
| Delivery | PSI Examination Services test center |
| Questions | 40 scored, multiple choice, one best answer |
| Time | 90 minutes |
| Pass mark | 70 percent, 28 of 40 correct |
| Format | Open book, approved bound references with permanent tabs |
| Fee | $79 per attempt |
| Retakes | As many as needed within 12 months; eligibility letter valid 120 days |
The full text of NCGS Chapter 87 and the related statutes is published free by the North Carolina General Assembly at ncleg.gov. Practicing against the real statutory citations, not just a study guide’s summary of them, is the fastest way to build the “where does this live” instinct the open-book format rewards.