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NASCLA Commercial General Building Contractor — Practice Exam

Procurement and contracting: business organization: practice questions

Our NASCLA Commercial GC bank has 5 questions on this topic. Here are 3 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

Which business form gives owners limited personal liability and pass-through taxation by default?

  1. A limited liability company (LLC)
  2. A C corporation, which files its own corporate tax return each year
  3. A general partnership
  4. A sole proprietorship
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A. A limited liability company (LLC) — A C corporation is taxed at the corporate level.

Question 2

What is a main disadvantage of a sole proprietorship?

  1. It can't hire employees
  2. It needs a board of directors and annual shareholder meetings
  3. It must file corporate tax returns
  4. The owner has unlimited personal liability for business debts
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D. The owner has unlimited personal liability for business debts — Business income is reported on the owner's personal return.

Question 3

In a general partnership, who is liable for the partnership's debts?

  1. No one personally
  2. Only the bank that lent the money to the partnership
  3. Only the partner who signed
  4. Each general partner, personally and fully
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D. Each general partner, personally and fully — Limited partners risk only their investment.

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