Legal Question in Business Law in California

I am a California Licensed Mortgage Broker and Real Estate Broker. I have been operating my business as a Sole Proprietor for the past 8 years. I am a one man shop and prefer to keep business as simple as possible. This is the reason why I have not established a corporation. In order to protect my personal assets, I was looking into forming an LLC, but I am being told that I cannot do so because California does not allow Mortgage Brokers to work as an LLC. Is this correct? I have seen Mortgage Brokers in California operate as an LLC. Is there another legal entity that would allow me to have personal asset protection that is not a corporation?


Asked on 9/30/12, 1:34 pm

2 Answers from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

No, a license mortgage broker cannot operate as an LLC in California. If you want the personal asset protection, you will need to incorporate.

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Answered on 9/30/12, 2:23 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The following is taken from the corporate licensing instructions of the California Department of Real Estate dated June, 2012:

"There are no provisions in the Business and Professions (B&P) Code which authorize a limited liability company to become licensed as a real estate broker.

Refer to: Sections 10158, 10159, 10159.2, 10170.5 10180, and 10211 of the (B&P) Code. Sections 2740 through 2746 of the Commissioner�s Regulations.

When a corporation wishes to act as a real estate broker, the firm must be licensed by the Department of Real Estate (DRE) through qualified broker-officers, who have either passed the broker license examination and are now qualified to obtain a broker license, or who are currently licensed as real estate brokers."

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Answered on 9/30/12, 6:34 pm


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