How to Incorporate Yourself As a Realtor

Realtors can incorporate their brokerage with the secretary of state

A Realtor is a person who is not only licensed to broker real estate transactions between a buyer and seller but is also a member of the Realtors association. Frequently assisting in large money transactions, a Realtor typically carries errors and omissions insurance (E & O insurance) but may also wish to establish more legal protections by incorporating or forming a limited liability entity.

To incorporate as a Realtor, a real estate broker must create articles of incorporation or articles of organization and register their fictitious name with the state or county.

Things You'll Need

• Articles of incorporation or articles of organization
• Fictitious name registration

Instructions

1. Choose a name for your real estate business. The name you give your real estate brokerage can be your full legal name or a fictitious name. You will not be able to include the term "Realtor" in the name of your real estate brokerage because it is a registered trademark of the National Association of Realtors.

2. Decide your real estate brokerage's structure. A corporation or a limited liability company (LLC) structure will be the best for a real estate brokerage. If you have employees (such as a receptionist), incorporating may be the best option. If you are working with other brokers, then forming an LLC will be more advantageous to you and the other members. In each case, the business will be a legal entity and protect your personal assets from the brokerage's liabilities.

3. Create your articles of incorporation or articles of organization. These documents, which can be drafted online with the assistance of a legal documentation service, establish the officers or members, set your business guidelines and structure. You will also need to name one officer, yourself or another member as a registered agent (a registered agent is responsible for receiving any legal documents).

4. File your corporation or LLC with the state in which you want to incorporate. In most states, you'll file your articles of incorporation or articles of organization with the secretary of state's corporation's division. In addition, you will also need to register your brokerage's fictitious name (if applicable with the secretary of state's office or local county agency).

Tips & Warnings

• You do not have to file for incorporation in the state where your office is located; each state has its own laws regarding franchise tax payments, liability protection and shareholder disclosures, and you may find that another state offers more benefits than your own. Before incorporating your brokerage, you may want to consult an attorney to ensure that you file the appropriate paperwork with the state in which you're incorporating, the states in which you're doing business, and local authorities.

• Your corporate name must not be identical to a business name already in use in the state in which you plan to incorporate. If you're concerned that your chosen name may not be unique, consult the secretary of state's office for verification before preparing your articles of incorporation.

References

• "The Real Estate Entrepreneur: Everything You Need to Know to Grow Your Own Brokerage"; Cliff Perotti; 2007
• "The Millionaire Real Estate Agent: It's Not About the Money...It's About Being the Best You Can Be!"; Gary Keller; 2004
• Incorporate: To Incorporate or Not to Incorporate