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

What is required for a designated broker to provide proof of ownership in a business entity?

1. Written agreement between partners

2. Ownership shares documentation

3. Certification of good standing

4. Annual financial statements

The correct answer is: Ownership shares documentation

To establish proof of ownership in a business entity, ownership shares documentation is essential. This documentation serves as the formal record of an individual's stake or interest in the business, outlining the distribution of shares among partners or shareholders. It provides clear evidence of ownership, which is fundamental for regulatory compliance, especially in the context of real estate brokerage operations. While various other documents may play a role in demonstrating different aspects of a business entity’s operation or health, they do not specifically serve as proof of ownership. For example, a written agreement between partners may outline the terms of the partnership but does not necessarily indicate the ownership stake. A certification of good standing confirms that the business is properly registered and compliant with state regulations but does not denote who holds ownership. Annual financial statements provide insight into the business's financial performance but do not clarify ownership interests. Thus, ownership shares documentation is clearly the most relevant and direct form of evidence needed to ascertain ownership in a business entity.