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

What type of business structure allows you to conduct business as an individual under your broker's license?

1. Corporation

2. Partnership

3. Sole Proprietorship

4. Independent

The correct answer is: Independent

The correct choice is the one that refers to a business structure that allows an individual to operate under a broker's license independently. This scenario typically describes a real estate agent who is affiliated with a licensed broker, allowing them to conduct transactions while utilizing the broker’s license. In many states, agents affiliated with a broker can work as independent contractors, where they function under the broker's supervision but maintain their own clients and conduct their business, thereby being referred to as independent agents or real estate professionals. The other choices represent different types of business structures. A corporation is a separate legal entity that requires a more complex setup and does not offer the same kind of independent operation under a broker's license. A partnership involves two or more individuals conducting business together, which is different from operating independently. A sole proprietorship usually indicates that one person runs the business under their own name and license, rather than under a broker's license. Thus, they wouldn't typically have access to the broker's credentials in the same manner as an independent agent would.