21 NCAC 58A .0502. BUSINESS ENTITIES

(a)  Every business entity other than a sole proprietorship shall apply for and obtain from the Commission a firm license prior to engaging in business as a real estate broker.  An entity that changes its business form other than by conversion shall submit a new license application upon making the change and obtain a new firm license.  An entity which converts to a different business entity in conformity with and pursuant to applicable North Carolina General Statutes is not required to apply for a new license.  However, such converted entity shall provide the information required by this Paragraph in writing to the Commission within 10 days of the conversion and shall include the duplicate license fee prescribed in Rule .0509 of this Section to have the firm license reissued in the legal name of the converted entity. Incomplete applications shall not be acted upon by the Commission.  Application forms for partnerships, corporations, limited liability companies, associations and other business entities required to be licensed as brokers shall be available on the Commission's website at www.ncrec.gov or upon request to the Commission and shall require the applicant to set forth:

(1)           the name of the entity;

(2)           the name under which the entity will do business;

(3)           the type of business entity;

(4)           the address of its principal office;

(5)           the entity's NC Secretary of State Identification Number if it is required to be registered with the Office of the NC Secretary of State;

(6)           the name, real estate license number and signature of the proposed qualifying broker for the proposed firm;

(7)           the address of and name of the proposed broker-in-charge for each office as defined in Rule .0110(a) of this Subchapter, along with a completed broker-in-charge declaration form for each proposed broker-in-charge;

(8)           any past criminal conviction of and any pending criminal charge against any principal in the company or any proposed broker-in-charge;

(9)           any past revocation, suspension or denial of a business or professional license of any principal in the company or any proposed broker-in-charge;

(10)         if a general partnership, a full description of the applicant entity, including a copy of its written partnership agreement or if no written agreement exists, a written description of the rights and duties of the several partners;

(11)         if a business entity other than a corporation, limited liability company or partnership, a description of the organization of the applicant entity, including a copy of its organizational documents evidencing its authority to engage in real estate brokerage;

(12)         if a foreign business entity, a certificate of authority to transact business in North Carolina and an executed consent to service of process and pleadings; and

(13)         any other information required by this Rule.

When the authority of a business entity to engage in the real estate business is unclear in the application or in law, the Commission shall require the applicant to declare in the license application that the applicant's organizational documents authorize the firm to engage in the real estate business and to submit organizational documents, addresses of affiliated persons and similar information.  For purposes of this Rule, the term "principal," when it refers to a person or entity, means any person or entity owning 10 percent or more of the business entity, or who is an officer, director, manager, member, partner or who holds any other comparable position.

(b)  After filing a written application with the Commission and upon a showing to the Commission that one principal of the business entity holds a broker license on active status and in good standing who will serve as qualifying broker of the entity, the entity shall be licensed provided it appears to the Commission that the applicant entity employs and is directed by personnel possessed of the requisite character and fitness required of applicants for a broker license by G.S. 93A-4(b). The qualifying broker of a partnership of any kind must be a general partner of the partnership; the qualifying broker of a limited liability company must be a manager of the company; and the qualifying broker of a corporation must be an officer of the corporation.  A licensed business entity may serve as the qualifying broker of another licensed business entity if the qualifying broker-entity has as its qualifying broker a natural person who is licensed as a broker.  The natural person who is qualifying broker shall assure to the Commission the performance of the qualifying broker's duties with regard to both entities.  A provisional broker may not serve as a qualifying broker.

(c)  The licensing of a business entity shall not be construed to extend to the licensing of its partners, managers, members, directors, officers, employees or other persons acting for the entity in their individual capacities regardless of whether they are engaged in furthering the business of the licensed entity.

(d)  The qualifying broker of a business entity shall assume responsibility for:

(1)           designating and assuring that there is at all times a broker-in-charge for each office and branch office of the entity as "office" and "branch office" are defined in Rule .0110(a) of this Subchapter;

(2)           renewing the real estate broker license of the entity;

(3)           retaining the firm's renewal pocket card at the firm and producing it as proof of firm licensure upon request and maintaining a photocopy of the firm license certificate and pocket card at each branch office thereof;

(4)           notifying the Commission of any change of business address or trade name of the entity and the registration of any assumed business name adopted by the entity for its use;

(5)           notifying the Commission in writing of any change of his or her status as qualifying broker within ten days following the change;

(6)           securing and preserving the transaction and trust account records of the firm whenever there is a change of broker-in-charge at the firm or any office thereof and notifying the Commission if the trust account records are out of balance or have not been reconciled as required by Rule .0117 of this Subchapter;

(7)           retaining and preserving the transaction and trust account records of the firm upon termination of his or her status as qualifying broker until a new qualifying broker has been designated with the Commission or, if no new qualifying broker is designated, for the period of time records are required to be retained by Rule .0108 of this Subchapter; and

(8)           notifying the Commission if, upon the termination of his or her status as qualifying broker, the firm's transaction and trust account records cannot be retained or preserved or if the trust account records are out of balance or have not been reconciled as required by Rule .0117 of this Subchapter.

(e)  Every licensed business entity and every entity applying for licensure shall conform to all the requirements imposed upon it by the North Carolina General Statutes for its continued existence and authority to do business in North Carolina. Failure to conform to such requirements shall be grounds for disciplinary action or denial of the entity's application for licensure.  Upon receipt of notice from an entity or agency of this State that a licensed entity has ceased to exist or that its authority to engage in business in this State has been terminated by operation of law, the Commission shall cancel the license of the entity.

 

History Note:        Authority G.S. 55-11A-04; 93A-3(c); 93A-4(a); 93A-4(b); 93A-4(d);

Eff. February 1, 1976;

Readopted Eff. September 30, 1977;

Amended Eff. July 1, 2014; July 1, 2009; January 1, 2008; April 1, 2006; July 1, 2005; April 1, 2004; July 1, 2003; October 1, 2000; August 1, 1998; January 1, 1997; July 1, 1994; May 1, 1990.