Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

All business entities engaged in real estate brokerage activity, including which of the following, must be licensed?

1. Corporations

2. Sole proprietorships

3. Partnerships

4. Non-profits

The correct answer is: Partnerships

The requirement for all business entities engaged in real estate brokerage activity to be licensed encompasses a broad range of business structures, including partnerships. Partnerships, which can include general partnerships and limited partnerships, are recognized as separate legal entities capable of entering contracts and conducting business. In the context of real estate brokerage, these entities must adhere to the licensing requirements established by the Texas Real Estate Commission (TREC). Licensing ensures that all parties engaging in brokerage activities are qualified and comply with regulations designed to protect consumers and maintain industry standards. In Texas, whether a brokerage operates as a corporation, sole proprietorship, partnership, or even a non-profit organization, it must be licensed if it engages in activities like buying, selling, leasing, or exchanging real estate on behalf of others. The importance of obtaining a license cannot be overstated, as it signifies that the business entity meets the necessary educational and ethical standards required to operate in the real estate market, thereby instilling trust in clients and the public.