How is a real estate brokerage corporation formed?

• A. By obtaining a business license only
• B. By merging with another company
• C. By filing a proposed charter with the Department of State to issue a certificate of incorporation
• D. By purchasing a franchise

Answer: (C)

Forming a real estate brokerage corporation is accomplished through the state's corporate formation process. The key step is filing a proposed charter with the Department of State. This charter, often called the articles of incorporation, sets out essential details like the company’s name, purpose, duration, registered agent, and share structure. Once the state reviews and approves this filing, it issues a certificate of incorporation, legally creating the corporation. After that formation, the brokerage can pursue the necessary licenses and regulatory requirements, including having a licensed broker in charge.

The other options don’t fit the formation act: a business license allows operating a business but doesn’t create a corporate entity; a merger changes or combines entities but is not the basic method of forming a new corporation; purchasing a franchise involves operating under another brand's system, not forming the corporation itself.