Section 3: Opening a Real Estate Office

Question 1

The Four Types of Business Entities that may register as a brokerage

Answer 1

• LLC
• Corporation
• Sole Proprietorship
• Partnership

Question 2

A non-incorporated entity that combines the pass-through profit/loss tax benefits of a partnership with the legal shield of a corporation.

Answer 2

Limited Liability Company (LLC)

Question 3

An entity where elected officers govern the affairs of the company, company assumes liability and offers a legal shield to the owners.

Answer 3

Corporation

Question 4

A simple, yet non-sheltered business structure where the owner has full control and liability

Answer 4

Sole Proprietorship

Question 5

A non-incorporated entity that can be general or limited. Shared personal liability.

Answer 5

Partnership

Question 6

Liability in Limited Partnerships

Answer 6

Liability is limited to the amount of money that partner has invested.

Question 7

Type of corporation where Stockholders, directors and officers of the company are typically the same people.

Answer 7

Close Corporation

Question 8

Type of corporation where officers typically desire to remain a small, tight-knit group

Answer 8

Close Corporation

Question 8

Prohibited Business Arrangement: A non-intentional arrangement that is created by the partners’ acts and gives the appearance of a partnership. Creates legal liabilities and penalties for those involved. Prohibited among licensees and may result in license suspension.

Answer 8

Ostensible Partnership

Question 8

True or False: LLC’s are a corporate entity

Answer 8

False

Question 9

Type of corporation where ownership is easily transferable through stock

Answer 9

General Corporation

Question 9

Type of corporation where there is a system of centralized management

Answer 9

General Corporation

Question 9

Prohibited Business Arrangement: An eccesiastical or church organization

Answer 9

Corporation Sole

Question 9

Type of corporation where transfer of stock is more complicated, given the ownership nature

Answer 9

Close Corporation

Question 9

Type of corporation where elected officers govern the affairs of the company, while the designated licensed broker is directly responsible for the real estate transactions and both are responsible to a large number of stockholders

Answer 9

General Corporation

Question 10

Prohibited Business Arrangement: Group of individual investors that buys and sells real estate. Any employee who buys or sells real estate for the trust and is compensated on a transaction basis must still be licensed.

Answer 10

Business Trust

Question 10

Prohibited Business Arrangement: A temporary arrangement between two parties for a single business transaction. Usually no written agreements are required for a joint venture.

Answer 10

Joint Venture

Question 11

Prohibited Business Arrangement: Can conduct business and buy/sell its own property only.

Answer 11

Cooperative association

Question 12

Prohibited Business Arrangement: Usually a group organized for a common purpose. Members are not partners, and the associations are not incorporated. May buy or sell their own property, usually through a trust.

Answer 12

Unincorporated association

Question 13

Branch Office

Answer 13

If associates regularly conduct business transactions there, FREC might demand that she registers as a branch office with proper signage.

Question 14

Four areas where offices need to be ADA Accessible

Answer 14

• Access approach and entrance
• Access to goods and services
• Access to restrooms
• Any other measures necessary

Question 15

ADA Title I

Answer 15

Title I of the ADA deals with employment. Specifically, it prohibits private employers, state and local governments, employment agencies, and labor unions from discriminating against qualified individuals with disabilities in the following areas:

• Job application procedures
• Hiring, firing, or advancement
• Compensation
• Job training
• Other employment terms, conditions, and privileges

Question 16

ADA Title III

Answer 16

Accessibility of public accommodations
* Prohibits discrimination in public accommodations
* Newly constructed or altered public places comply with ADA standards for architecture