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Texas Occupations Code - OCC § 1101.355. Additional General Eligibility Requirements for Business Entities; Registration of Certain Business Entities

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) To be eligible for a license under this chapter, a business entity must:

(1) designate one of its managing officers as its broker for purposes of this chapter; and

(2) provide proof that the entity maintains errors and omissions insurance with a minimum annual limit of $1 million for each occurrence if the designated broker owns less than 10 percent of the business entity.

(b) A business entity may not act as a broker unless the entity's designated broker is a licensed individual broker in active status and good standing according to the commission's records.

(b-1) In determining whether a designated broker is in good standing under this section, the commission may consider:

(1) the disciplinary history of:

(A) the broker; or

(B) any business entity for which the broker serves or previously served as a designated broker; and

(2) the payment status of any amount owed to the commission by:

(A) the broker; or

(B) any business entity for which the broker serves or previously served as a designated broker.

(c) A business entity that receives compensation on behalf of a license holder must be licensed as a broker under this chapter.

(d) Notwithstanding Subsection (c) or any other law, a business entity is not required to be licensed under this chapter if the business entity:

(1) receives compensation on behalf of a broker or sales agent licensed under this chapter that is earned by the license holder while engaged in real estate brokerage;

(2) performs no other acts of a broker;

(3) is:

(A) a limited liability company as defined by Section 101.001, Business Organizations Code; or

(B) an S corporation as defined by 26 U.S.C. Section 1361;

(4) is registered with the commission; and

(5) is at least 51 percent owned by the license holder on whose behalf the entity receives compensation.

(e) The commission shall adopt rules providing for the registration of a business entity described by Subsection (d).

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Cite this article: FindLaw.com - Texas Occupations Code - OCC § 1101.355. Additional General Eligibility Requirements for Business Entities; Registration of Certain Business Entities - last updated January 01, 2024 | https://codes.findlaw.com/tx/occupations-code/occ-sect-1101-355/

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