Final answer:
A real estate brokerage can operate under a corporation provided it follows legal protocols to establish the business as a registered legal entity. The corporation can raise revenue through selling shares or borrowing and offers limited liability among other benefits. The brokerage must comply with all regulations that apply to corporate entities.
Step-by-step explanation:
A real estate brokerage may conduct business under the name of a corporation as long as the broker ensures that the business is appropriately registered and recognized as a legal entity. The process of forming a corporation involves obtaining permission from national and state governments to incorporate, something that can convert a sole proprietorship or a partnership into this more formal business structure. Once incorporated, a corporation becomes a legal entity that is separate from its individual owners, possessing the ability to enter contracts, sue or be sued, and to raise revenues through selling shares or borrowing.
In the context of a real estate brokerage operating as a corporation, the broker must adhere to regulations that govern corporate entities, which includes corporate governance, adherence to industry-specific regulations, and compliance with financial and legal requirements. When a brokerage operates as a corporation, it can take advantage of the corporate strengths such as limited liability for its owners, the potential for raising capital, and an unlimited lifespan as long as the business is operational.