Real Estate Brokerage & LLC

[Account Closed]

I am a full time real estate investor with 2 other partners (unlicensed) other then myself. I am starting a Real Estate brokerage which my 2 partners will be a part of (equally). Now, from what I had researched in Connecticut, the person holding the Broker license has to hold over 51% ownership of the Entity - is there any way around this? Is it OK that I hold the brokers license as 51% or does the entity need to hold the license? If 51% ownership of LLC needs to be held by myself (person holding brokers license), is it still possible for "back end ownership" to be held as an equal 33.3% ownership amongst the 3 partners (would this be considered the stock interest rather then % of ownership)?

Any insight would be much appreciated!  Cant find this information anywhere online!

[Jonathan Makovsky]

 Hi Brian, I spoke to the person that approves the brokerages in the Connecticut licensing division and she was very helpful in explaining the technicalities. My understanding is that:

1) The person holding the Broker license has to hold over 51% ownership of the Entity - is there any way around this? DON'T BELIEVE THERE IS ANY WAY AROUND THIS.

2) Is it OK that I hold the brokers license as 51% or does the entity need to hold the license? IF I'M NOT MISTAKEN YOU CAN BE A BROKER AND YOUR ENTITY CAN BE LICENSED AS WELL (WHICH YOU WILL NEED TO PAY TWO SEPARATE FEES TO DO THAT). HOWEVER, YOU CAN JUST HAVE YOUR ENTITY LICENSED AND YOU CAN ACT AS A REPRESENTATIVE TO THE ENTITY, WHICH WILL ONLY COST YOU ONE APPLICATION FEE. (YMMV.)

3) If 51% ownership of LLC needs to be held by myself (person holding brokers license), is it still possible for "back end ownership" to be held as an equal 33.3% ownership amongst the 3 partners (would this be considered the stock interest rather then % of ownership)? CONFIRM WITH THE LICENSING DIVISION AND AN ATTORNEY, BUT MAYBE THE STRUCTURE OF YOUR BUSINESS CAN BE DIFFERENT. AS AN EXAMPLE, MAYBE YOU CAN RETAIN 51%+ OWNERSHIP OF THE ENTITY, HOWEVER, OTHER ITEMS ARE SPLIT 33.3% LIKE PROFIT/LOSS, BUSINESS DECISIONS, ETC.