CBPA is working with Senator Moorlach (R-Costa Mesa) and acting as the sponsor for SB 1253 which adds limited liability companies (LLC) to the list of business entities that can act as a licensed real estate broker.

Since at least 1943, California has regulated real estate broker activities pursuant to the provisions of the Business and Professions Code.  The basic premise is that it is illegal to engage in the business of a real estate broker without a license from the Bureau of Real Estate.  Currently individuals may be licensed as well as a “corporation.”  This bill would add limited liability companies (LLC).

LLCs did not exist when California began licensing and regulating real estate brokers.  These business entities were introduced in California in the 1970s, gradually evolved in the 1980s and 1990s, and are now the vehicle of choice for a significant proportion of real estate related companies.  Under the Corporations Code, LLCs have “all the powers of a natural person in carrying out its business activities,” but can render services requiring a license under the B&P Code only if expressly authorized.

LLCs are now a common business entity used in California and we believe it is time to update the statute to recognize and allow LLCs in the real estate industry in the same manner that C-Corporations are used.

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