Steps To Follow To Establish Your Real Estate Business
Operating a successful real estate business starts from the way you establish it. When establishing your real estate business, you have multiple options. You can choose to establish your business as a sole proprietorship, partnership, a corporation, or a Limited Liability Company (LLC).
Get Professional Help To Establish Your Real Estate BusinessWhen establishing your business, the professionals you will need include a lawyer and a tax professional. Your attorney will help you with setting up the business. The tax professional will advise you on the legal structures you can utilize to reduce your tax burden.
Registering Your Real Estate BusinessAfter setting up your business entity and submitting your articles of incorporation to the Florida Department of State Division of Corporations, you have to register your business with the Department of Business and Professional Regulation (DBPR) as a real estate brokerage.
You can do this by filling the form RE7 and sending it to the DBPR.
Registering Your Real Estate Business As A CorporationA corporation is made up of the shareholders, board of directors, and the officers. The shareholders are the owners of the company. They have voting rights and are entitled to the real estate business* profits.
They use their voting rights to appoint the board of directors. The board of directors, in turn, elect the officers of the company. The officers of the company are responsible for the day-to-day running of the company. They are responsible to the board of directors and the shareholders.
When you register a corporation with the DBPR, you have to register the name of anyone appointed as a member of the board of directors. While registering, you have to reflect the board member*s position in the corporation.
A member of the board of directors has to either be registered as a qualifying broker or be unlicensed. This means that a sales associate or broker associate cannot be a member of the board. If an unlicensed person has to serve as an officer or a director, his/her activities will not include sales or sales-related activities.
Registering Your Real Estate Business As An LLCAn LLC is similar to a corporation but is less complex. In an LLC, it is not required that you have a board of directors or officers. The people required to form an LLC are the members. An LLC can either be member-managed or manager-managed.
The members of an LLC are similar to shareholders of a corporation. This means they are entitled to the profits and have voting rights.
In a member-managed LLC, all the members are responsible for running your real estate business on a daily basis. In a manager-managed LLC, the members select the managers. It is these managers that have to run the day to day business of your real estate business.