REQUIREMENTS TO REGISTER A REAL ESTATE COMPANY

Registering a real estate company in Florida involves legal, administrative, and licensing requirements. Whether forming a brokerage or another real estate business, compliance with these key requirements ensures a smooth and legally sound operation.

Below is a detailed breakdown of the eight essential requirements for establishing your Florida real estate company.

8 Key Requirements to Register Your Florida Real Estate Company

1. Choose a Business Structure.
2. Appoint a Qualifying Broker.
3. Register with the Florida DBPR.
4. Establish a Physical Office Location.
5. Maintain Records & Legal Compliance.
6. Obtain Business Licenses & Tax Registrations.
7. Stay Compliant with Renewals & Continuing Education.
8. Secure Errors & Omissions (E&O) Insurance.

1: Choose a Business Structure

The first step in forming a real estate company is selecting a legal structure that best suits your goals and operations. In Florida, the most common business entities include:

• Limited Liability Company (LLC):

An LLC is a flexible option that offers liability protection, meaning your personal assets are generally protected from business debts or lawsuits. Florida’s LLC regulations also provide tax flexibility, as LLC owners can choose how they want the company’s income to be taxed (as a sole proprietorship, partnership, or corporation). LLCs must file Articles of Organization with the Florida Division of Corporations and appoint a registered agent.

• Corporation (Inc.):

A corporation is ideal for businesses that may seek outside investors or plan to issue stock. It provides strong liability protection, but it involves more administrative oversight, including annual shareholder meetings, detailed recordkeeping, and corporate tax filings. Florida corporations must file Articles of Incorporation and meet additional corporate governance requirements.

• Professional Association (PA):

A PA is designed specifically for licensed professionals, including real estate brokers. It offers many of the same liability protections as an LLC or corporation but is reserved for those who hold a Florida professional license. PAs must also register with the Florida Division of Corporations and adhere to certain naming conventions, such as including “P.A.” in the company name.

• Sole Proprietorship (Limited Use Case):

Although technically the simplest option, a sole proprietorship is not typically used for real estate companies that employ other agents or brokers. This structure offers no liability protection, meaning the owner’s personal assets are fully at risk. Sole proprietorships do not require formal registration, but they are only suitable for sales associates working under a licensed broker.

🔹Next Step: Register with the Florida Division of Corporations at Sunbiz.org once you decide on a business structure.

2: Appoint a Qualifying Broker

Florida law mandates that every real estate company appoint at least one active Florida-licensed real estate broker as the “qualifying broker.” This individual is responsible for overseeing all transactions and ensuring legal compliance.

Responsibilities of a Qualifying Broker:

• Supervising licensed agents within the company.
• Ensuring compliance with Florida real estate laws.
• Must be listed as an officer, director, member, or manager of the company.

Eligibility Requirements:

• Must hold an active Florida real estate broker license.
• Sales associates cannot serve as qualifying brokers.
• The broker’s license must be renewed and meet continuing education

🔹 Florida Department of Business and Professional Regulation (DBPR): The DBPR oversees real estate licensing, provides qualification criteria, and allows you to verify broker licenses online.

3: Register with the Florida Department of Business and Professional Regulation (DBPR)

Once you’ve established your business entity and appointed a qualifying broker, the next step is to apply for a Real Estate Company License through the DBPR. This license is mandatory for all real estate companies operating in Florida.

Application Process:

1. Form Completion: Fill out the “Real Estate Company – Initial Application for License as a Corporation, LLC, or PA (RE 7)” form. You can complete this online through the DBPR portal or by printing and mailing the form.
2. Application Fee: Pay the $77 non-refundable application fee.
3. Broker and Company Details: Provide information about your qualifying broker, business structure, and registered address.
4. Submission: Submit the application and await DBPR review and approval.

📌 Processing Time: Online applications are typically processed within 7–14 business days, but errors or missing documents may delay approval.

📌 Where to Apply: Applications can be submitted online at MyFloridaLicense.com.

📌 Source: For the latest requirements and application details, visit the Florida DBPR at MyFloridaLicense.com CheckList.

4: Establish a Physical Office Location

Florida real estate companies must have a physical office location that complies with state and local regulations.

🏢 Office Requirements

• Must be registered in the company’s name.
• Should be a dedicated space for business activities.
• Must comply with local zoning laws.

🚨 Office Signage Requirements

• Your office sign must be clearly visible at the entrance.
• It must display:
• Company name.
• Qualifying broker’s name.
• The phrase “Licensed Real Estate Broker”.

❗ Can I Operate from Home? Home-based real estate offices are allowed if they comply with local zoning laws and meet the DBPR’s requirements. The office must still be properly registered and equipped to handle real estate operations. However, virtual offices (without a dedicated business address) are not permitted.

🚨 Failure to meet these requirements may result in penalties from the Florida Real Estate Commission (FREC).

5: Maintain Records & Legal Compliance

Florida law requires real estate businesses to maintain accurate transaction records for regulatory purposes.

📂Documents to Keep on File

• Sales contracts and lease agreements.
• Client correspondence.
• Financial and escrow records.

📌 Retention Period: These records must be accessible and retained for at least five years to ensure regulatory compliance and availability for audits or investigations.

6: Obtain Business Licenses and Tax Registrations

In addition to a real estate company license, to legally operate, your company may need:

• Florida Business Tax Receipt (formerly known as an occupational license) from your local county.
• Employer Identification Number (EIN) from the IRS for tax purposes.
• Sales tax registration (only for taxable services like property management fees – real estate commissions are NOT taxable in Florida).

7: Stay Compliant with Renewal and Continuing Education

Real estate companies and their brokers must renew their licenses biennially (every two years) and complete 14 hours of state-approved continuing education to remain compliant.

📌 Stay updated with DBPR and FREC requirements at: MyFloridaLicense.com.

8: Secure Errors & Omissions (E&O) Insurance and Financial Requirements

Florida does not require real estate companies to carry E&O insurance, but it’s strongly recommended.

📌 Why is E&O Insurance Important?

• Protects against client lawsuits related to errors, negligence, or contract disputes.
• Covers legal fees and settlements.
• Enhances client trust and business credibility.

Note: Some brokers and companies require their agents to carry E&O insurance before working under them.

📌 Additional Financial Requirements:

• Employer Identification Number (EIN): Obtain an EIN from the IRS if your company will hire employees or if you need a federal tax ID.
• Business Tax Receipt: Many counties in Florida require a local business tax receipt, formerly known as an occupational license, to operate legally.

Common Mistakes to Avoid

🚫 Not registering with Sunbiz.org before applying for a DBPR license.

🚫 Failing to appoint a qualifying broker before submission.

🚫 Ignoring local zoning laws for office setup.

🚫 Not keeping transaction records updated.

By avoiding these errors, you can ensure a smooth registration process.

FAQs

Q1. Can a sales associate open a real estate company in Florida?

❌ No. Only licensed brokers can open a real estate company.

Q2. Do I need Errors & Omissions (E&O) insurance?

✅ It’s not required but highly recommended to protect against legal claims.

Q3. Can I operate a virtual real estate office in Florida?

❌ . A physical office is mandatory, per Florida law.

Final Thoughts

Starting a real estate company in Florida involves multiple legal and administrative steps. You can build a compliant and successful real estate business by selecting the proper business structure, appointing a qualified broker, registering with the DBPR, and complying with office and record-keeping requirements.

For the latest licensing requirements, visit the Florida DBPR website.

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