Florida Broker Practice Exam

What is the main feature distinguishing a corporation sole from other types of business entities?

1. It can file for LLC status

2. It serves noncommercial purposes only

3. It cannot be registered as a real estate broker

4. It offers protection from personal liability

The correct answer is: It cannot be registered as a real estate broker

A corporation sole is a unique type of business entity primarily formed for religious or charitable purposes and is typically established to allow a single individual to represent an organization in legal matters. The defining characteristic that sets a corporation sole apart from other business entities is that it is designed to operate mainly for noncommercial purposes, such as those associated with a church or non-profit organization. The statement about a corporation sole not being able to register as a real estate broker highlights an important aspect of its function and limitations within the legal and business framework. Unlike other business entities like corporations or limited liability companies, which can engage in a variety of commercial activities, a corporation sole is restricted in its ability to operate in business like a real estate firm. This distinguishing feature emphasizes that its scope is primarily intended for specific, often noncommercial directions rather than a full commercial enterprise. Because of this structure, individuals looking to engage in for-profit business activities like real estate brokerage would typically opt for different entity types, rather than forming a corporation sole, which inherently lacks the capacity for such registration.