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How to pass the Arkansas Contractor Business and Law exam

One open-book exam, one reference book, plus experience, net worth and a $10,000 bond. Here’s how the Arkansas commercial license works and how to study for its Business and Law exam, checked against the state’s own documents.

At a glance

The exams

Question count, time and passing score are from PSI’s Arkansas Business and Law outline; the Board’s 2025 testing instructions confirm 50 questions, 2 hours and open book. PSI may add up to 10 unscored experimental questions, and the time for them doesn’t count. You use PSI’s online calculator and can’t bring your own.

Before you apply

• Business and Law score: your qualifying party passes the exam and you send the score to the Board. The license can be approved but not released without it.
• Qualifying party: a sole owner, a partner, an officer or LLC member active in day-to-day work, or a full-time employee. If the qualifier leaves, tell the Board within 15 days and have a replacement qualified within 30 days.
• Experience and references: five years for Building (one year for a specialty), shown on three reference forms from people who aren’t related to the company. References can’t be more than 90 days old.
• Financial statement: from an independent CPA, dated less than one year ago. An unrestricted license needs a reviewed or audited statement. A restricted license can use a compiled statement.
• Net worth: $50,000 for Building, Heavy, Highway and Municipal & Utility; $20,000 for Light Building, Mechanical and Electrical; $5,000 for a specialty. New applicants need half in cash and positive working capital.
• Bonds: a $10,000 contractor’s surety bond before the license is released. You can file a surety bond of 10 times the required net worth instead of a financial statement, but it doesn’t replace the $10,000 bond.
• Workers’ comp: if you have one or more employees, the application asks for a certificate of workers’ compensation coverage.

Step by step

1. Choose your classificationBuilding lets you take general contracts for commercial buildings and all their specialty work. Light Building is limited to new commercial projects under $1.5 million and no more than two stories.
2. Schedule the exam with PSIRegister online at test-takers.psiexams.com/arconst or call PSI. Pick the AR Business and Law Examination and pay the $84 fee.
3. Buy and tab the bookGet the NASCLA Contractors Guide to Business, Law and Project Management, Arkansas edition. That is the only reference you are tested from.
4. Line up your money and bondGet your CPA financial statement (or bond in lieu of it) and the $10,000 surety bond, both in the exact company name and EIN you’re licensing.
5. File the applicationMail the commercial application with the $100 filing fee, three references, your score and your documents. The form asks for it three weeks before a board meeting, and it must be complete within 90 days.
6. Get approved at a board meetingThe Board reviews applications at its meetings. Don’t bid commercial work of $50,000 or more until your license is issued.

The reference books

The exam uses one book: the NASCLA Contractors Guide to Business, Law and Project Management, Arkansas edition. The Board says you will only be tested from this guide.

The current outline has 50 scored questions: Arkansas contractor rules and regulations (9), contracts (5), estimating and bidding (5), insurance and bonding (5), business management (4), financial management (4), project management (4), Arkansas lien laws (4), labor laws (3), tax laws (3), environmental laws (2) and OSHA recordkeeping (2).

Know the Arkansas rules: the biggest single topic is the state’s own licensing law and rules. The Board publishes them together as the Arkansas Commercial Contractors Licensing Law.

What you can bring: the guide, highlighted, underlined, annotated and tabbed ahead of time. Permanent tabs only (tabs that would tear the page if removed). No Post-it notes, and no writing in the book during the exam. Downloaded material must be bound.

A 6-week study plan

On test day

• Arrive 30 minutes early with one government-issued photo ID and your Arkansas NASCLA guide.
• Permanent tabs only. Remove any Post-it notes or removable tabs before you go.
• You can’t bring a calculator. Use the online calculator in the exam.
• You get about 2 minutes 24 seconds per question. Answer what you know first, then look up the rest.
• Make sure the exam on screen is the AR Business and Law Examination before you start.
• PSI gives you your result right away. It’s your job to fax or mail the passing score to the Board.

Quick answers