Florida Broker Practice Exam

What can a broker associate or sales associate form in addition to holding their licenses?

1. Trade association

2. Professional corporation

3. Limited liability partnership

4. Joint venture

The correct answer is: Professional corporation

A broker associate or sales associate can form a professional corporation in addition to holding their licenses because it allows them to operate their real estate business in a formalized structure that can provide certain legal protections. A professional corporation (PC) is particularly useful for professionals such as real estate agents, as it can help limit personal liability while also providing tax advantages and enabling the corporation to continue existing beyond the individual. This structure allows real estate professionals to pool resources, share expenses, and benefit from the added credibility of a corporate entity. While other forms of business organizations exist, such as trade associations or joint ventures, they do not specifically cater to licensed professionals in the way that a professional corporation does. A limited liability partnership (LLP) could also be an option, but it may not be as common for individual associates compared to setting up a professional corporation.