Which trust type has units sold to the public as securities and cannot register as a real estate brokerage corporation?

• A. Sole titleholder
• B. Business trust / common law trust / Massachusetts Trust
• C. Not-for-profit corporation
• D. Cooperative Association

Answer: (B)

The idea being tested is how the form of an entity affects its ability to hold a real estate broker license. A business trust, also called a common law trust or Massachusetts trust, is set up to raise capital by selling units to the public as securities. Because this arrangement is established as a trust rather than a stock-based corporation, it cannot register as a real estate brokerage corporation, which under typical licensing rules must be a corporate entity that can hold and operate a broker’s license.

Other forms described don’t involve selling units to the public as securities, so they don’t match the scenario of an entity that issues securities and can’t register as a real estate brokerage corporation. A sole titleholder is simply one person owning property, not a securities-based structure; a not-for-profit corporation is organized for a mission rather than to issue marketable securities; a cooperative association operates as a member-owned entity but isn’t the securities-issuing trust described.