Business Licenses for Real Estate Brokerages

by JOSEPH AUTILIO Executive Director, Massachusetts Board of Registration of Real Estate Brokers and Salespersons | Apr 29, 2015
Answers to agents’ questions regarding real estate licensing in Massachusetts.
Q. Do I need to get my business brokerage licensed?

A. Yes you do, assuming you actually have a business entity that engages in brokering. Many licensed brokers operate simply under their name, which is perfectly fine, because they are licensed.  This type of practice is typically referred to as a sole proprietorship.  Often these brokers say that they are a business or are in the business of brokering which is essentially accurate, but when talking about a license for a business, they are really talking s about a chartered business with /the state of Massachusetts. The relevant licensing law permits the Board to issue a Real Estate Broker’s license not just to individuals who qualify, but also to businesses that qualify.  Corporations, General or Limited Partnerships, Limited Liability Companies and Limited Liability Partnerships all can be licensed as real estate business brokers provided they satisfy the statutory requirements for licensure.  

The Board can only consider licensing a business as a real estate broker if it is first chartered as a business with the Commonwealth and that is accomplished through the Corporations Division of the Massachusetts Secretary of State.  

Once the business is properly chartered by the Secretary of State and that is verified to the Board, the process of licensing it as a real estate business broker can commence.  
There are a number of requirements for licensure that the Board can address for those businesses that want to obtain licensure, but the most immediate is the need for the business to have an individually licensed real estate broker. The broker must be in good standing with the Board as an officer for a corporation, a partner in a partnership or a member of a Limited Liability Company.  That individually licensed Massachusetts Real Estate Broker is what the statute refers to as the “Designated Broker” for the business.  
In the office, the Board refers to that broker as the “Broker of Record” for the business.  The Designated Broker or Broker of Record is responsible for the brokering activities of the licensed business and its licensed real estate agents.

Should the business cease to exist with the Massachusetts Secretary of State due to its dissolution, voluntarily or involuntarily (typically for non-payment of minimum taxes),  then the license which the Board issued to that business as a broker is no longer valid because there no longer is a business in Massachusetts.

Q. Why is the designated broker in a business responsible for its activities?

The relevant licensing statute makes the Designated Broker
in a Board licensed business responsible for the businesses brokering activities.  While a properly chartered business in Massachusetts may be licensed as a real estate broker that authorizes the business to conduct brokering through its agents. Only one of those agents can be the Designated Broker. The other individually licensed real estate brokers and salespeople affiliated with the business are the responsibility of the Designated Broker.