What penalties may a contractor face for operating without a valid license?

A contractor found operating without a valid license may face serious repercussions, including fines, legal action, and a prohibition from collecting payment for work performed. This response highlights the importance of adhering to licensing laws that govern the construction industry.

Operating without a proper license undermines consumer protection and can lead to unlicensed work that may not meet legal code requirements. Consequently, regulatory authorities enforce strict penalties to uphold these standards. Fines serve as a financial consequence for non-compliance, while legal action could involve lawsuits or other legal proceedings initiated either by regulatory bodies or clients affected by the contractor's unlicensed activities. Furthermore, the inability to legally collect payment for any work conducted under an unlicensed status acts as a significant deterrent, emphasizing the legal obligation for contractors to be properly licensed before engaging in construction activities.

The other options do not accurately reflect the typical consequences faced by unlicensed contractors, as they either underestimate the severity of the penalties or present unrealistic outcomes.