A brokerage office may not be operated as a business trust, cooperative association, unincorporated association, or corporation sole. A brokerage office may engage in a joint venture with other brokerage offices.

JOINT VENTURE (JOINT ADVENTURE)

Formation

A joint venture, also called a joint adventure, is a temporary business relationship formed when

u more adult parties combine their efforts to complete a single business transaction or a Predetermined definite number of transactions. A joint adventure agreement can be oral or written. It is not necessary to file any documents with any state agency or official to form a joint venture.

Composition

The parties in a joint adventure are not partners but are joint adventurers. Their rights, duties, and obligations are similar to those of partners in a partnership except they cannot bind each other concerning any new business venture.

Joint Adventures by Different Business Entities

A corporation, unless prohibited by its charter, and other business entities, such as sole proprietorships, partnerships, and limited partnerships, may enter into joint adventures.

Real Estate Brokerage

Real estate brokers who combine their efforts in a real estate transaction create a joint adventure. This is commonly known as co-brokerage or cooperating on a listing. The joint adventure can act as a broker without registering with the FREC because the brokers involved are already individually licensed by the FREC and their relationship is temporary.

BUSINESS TRUST OR SYNDICATION

Formation

A business trust can be formed to engage in transactions involving its own real estate. Filing a declaration of trust with the secretary of state creates it. It cannot be formed to broker real estate.

Composition

A business trust consists of a number of persons who make investments in the trust at a stipulated sum per unit of the trust. The unit holders elect a board of trustees to manage the trust and distribute the profits among the unit holders.

Real Estate Ownership

A business trust may own, buy, and sell real estate. The trustees hold the title to its property.

Services of Real Estate

Anyone who performs any service of real estate for the trust must be licensed by the FREC.

Liability of Unit Holders and Trustees

The law on business trusts is silent as to the personal liability of the unit holders and trustees, although it is basically the same as for a corporation.

Example: A real estate investment trust (REIT).

COOPERATIVE ASSOCIATION

Formation

Florida corporate statutes permit a cooperative association to be formed in a manner similar to Forming a corporation not for profit, by filing with the secretary of state. Cooperative associations may do commercial business within prescribed limitations, but cannot broker real estate.

Composition

 A cooperative association usually is formed by a group of merchants or businessmen to advertise, promote, and market their products.

Real Estate Ownership

A cooperative association may own, buy, and sell real estate in the same manner as a corporation for profit. All employees of the cooperative association may perform any service of real estate in relation to cooperative association property without registering with the FREC. Example: A citrus co-op.

CORPORATION SOLE (ECCLESIASTIC OR CHURCH ORGANIZATION)

Formation

A corporation sole may be formed in Florida according to common law principles. However, it cannot be created for commercial business and therefore cannot broker real estate.

Composition

A corporation sole consists of a bishop or other appropriate clerical personage designated to hold title to church property. The person holding title to the corporate sole property is the sole titleholder. In the event of the sole titleholder’s death, resignation, or removal, the title to the corporate sole property descends to the titleholder’s successor in office-not to his or her heirs. All employees of the corporation sole may perform any service of real estate in relation to the corporate sole property without registering with the FREC.

Protecting the Public

To properly protect the public, a real estate broker should deal with a corporation sole as he or she would deal with a corporation not for profit.

UNINCORPORATED ASSOCIATION

Formation

An unincorporated association may be formed by a group of persons informally organized to meet a common need. It cannot be formed for commercial business and therefore cannot broker real estate.

Liability

An unincorporated association can incur debts and liabilities, and the members are liable to creditors and others as in a partnership (individually and totally).

Real Estate Ownership

An unincorporated association may hold title to real property through a trustee.

Protecting the Public

To properly protect the public, a real estate broker should deal with such organizations as he or she would deal with a corporation not for profit.

Example: A community improvement association.

FICTITIOUS AND TRADE NAMES

Florida law defines a fictitious name as any name used by a person to transact business in Florida other than the person’s legal name. A trade name must be registered with the division of corporations of the Department of State. A person licensed by the DBPR for the purpose of practicing his or her profession is exempt from the registration requirements (Chapter 865.09, F.S.).

Florida real estate license law allows an individual broker, partnership, or corporation to use a trade name as long as the trade name is disclosed on the registration or license. The FREC will not issue

A license containing a trade name that is the same name as any licensee registered with the FREC, and no individual broker, partnership, or corporation may use more than one trade name. The actual name of an individual or entity is not a trade name. Sales associates or broker associates may not use a trade name (6132-10.034, F.A.C.).