NAR Information Central has developed a checklist for broker members to determine whether to distribute their listings on third-party websites. The checklist responds to concerns among brokers over some third-party websites that keep outdated listings on their pages or make listings available elsewhere on the web without authorization, among other concerns.
The Internal Revenue Service from time to time offers tax tips to for-profit and not-for-profit entities. The IRS recently provided the following tax tip to start-up businesses. Start-up not-for-profit leaders, pay attention as the advice applies to you too. First, decide on the type of business, e.g., a corporation, partnership or sole proprietorship, or one of the new hybrids such as a LLC. Learn the type of tax system that applies to that type of business, and don’t forget self-employment, employment and excise taxes in addition to income taxes, and any state and local income and property taxes and fees. Get an employer identification number from the IRS, which will be necessary for opening a bank account. Decide on necessary bookkeeping and records. Decide on your tax year; it does not have to be January 1 to December 31. Decide on your accounting method, cash or accrual.
When you start a real estate business in which you use a name other than your own, you must file your assumed name with the county Clerk’s Office under DBA “Doing Business As” Statute. Upon receipt of the assumed name certificate (DBA) you must notify our Office in writing and submit a copy of your assumed name certificate.
If you are a corporation, limited liability company, limited partnership, you must contact the Secretary of State’s office to get instructions for filing an assumed name.
Opening a New Office?
Before You Ever Open Your Door
It is not a difficult process but it does have its steps and it does take time. At the present, the Licensing Division is taking about 6 to 8 weeks to produce licenses. Opening your door without being properly licensed puts your new company in immediate jeopardy. For real estate partnerships, corporations and LLCs, you must have the license in hand before you can open your door.
I’d like to think that the decision to open an office is the result of a well thought out plan and you have talked to an accountant and a lawyer. Although it sounds cliché, business plans do have value and should be done. If nothing else, a good business plan will make you think through the finances of your business. Remember, you will now have financial obligations that were previously covered by your broker.
An accountant and lawyer should help you decide on the structure of your business whether it be sole proprietor, corporation, LLC or partnership. There are legal and tax consequences for each.
Sole Proprietorship-Opening your office as a sole proprietor is the least legally protected but fastest and easiest way to open your office. If you are going to open an office in your home, you must verify that your home is zoned for a real estate business. Once your present broker has signed the termination line on your license and returned it to the Licensing Division you can then fill out a 45 Day Permit Sponsor Card (available at www.idfpr.com) showing you as self-sponsored. This sponsor card, along with a Consent to Audit form and the appropriate fee, can then be sent to the Licensing Division in Springfield. Always make copies of anything you send and send it in a way that allows for verification of receipt. If you plan to advertise your company under any name other than your own, you must acquire an Assumed Name Certificate from the County Clerk’s Office. You must have an assumed name for every county in which you will be doing business. Once you have received that Certificate, mail a copy to the Licensing Division. You must advertise under your own name until you have the Certificate.
FPR Brokerage entities expire every two years on October 31
A license issued prior to August 1 will need to renew its license again prior to October 31
IL SOS – registrations renew annually by paying an annual fee and submitting an annual report
If you are going to open as a real estate partnership, corporation or LLC, that entity must be legally formed first through the Secretary of State’s Office. You can find these forms at www.cyberdriveillinois.com. Check with your lawyer to see about expediting the processing time with the Secretary of State’s Office.
All principals that are actively participating in the running of the real estate company must have an active broker’s license.
Non-licensed owners will need to send a signed notarized letter of Non-Participation to the Licensing Division when applying for the real estate company license.
Salespersons cannot individually or collectively hold more than 49% ownership. Sales licensees cannot sign a letter of Non-Participation.
You must also acquire a FEIN number. This can be done online at www.irs.gov.
If you are going to use an Assumed Name with your partnership, corporation or LLC, you will again need an Assumed Name Certificate. Partnership assumed names are done through the County Clerk’s office. Corporation and LLC’s are done with the Secretary of State’s Office. Again that form can be found at www.cyberdriveillinois.com.
Once you are a legal entity with the Secretary of States office and then the Licensing Division, you can open your doors. Signage must be visible and reflect your legal name registered with the Licensing Division.
Last, but not least, you need to make sure that the internal structure of your office is compliant – but that’s a whole other story. Good Luck!
