When a personal real estate corporation is not appropriately licensed with the Real Estate Council, not maintained in good standing with the Registrar of Companies, or not controlled or operated in accordance with the Real Estate Services Regulation, the licensee who owns it may face discipline. And if payments are made to a personal real estate corporation that is not licensed, the managing broker will also face discipline.
Don’t let that happen to you — there are simple steps you can take to make sure a personal real estate corporation is licensed, in good standing and operating lawfully.
If you have a personal real estate corporation, the Business Corporations Act requires you to file an Annual Report each year. You must send the Annual Report to the Registrar of Companies — will open in a new tab within 60 days of the anniversary of your incorporation.
If you do not file this report, the Registrar of Companies may begin dissolution proceedings on your corporation. And if your personal real estate corporation loses its incorporated status, you will lose both the real estate licence you hold for the personal real estate corporation and your individual licence — meaning you will face discipline if you continue to provide real estate services.
Your personal real estate corporation is just that: personal. You, and only you, may be a director and officer of the corporation, and only you may own voting shares in the corporation. In addition, there are very specific limitations on the activities that a personal real estate corporation may undertake.
If you make changes to the ownership or control of your corporation, it no longer meets the requirements for a personal real estate corporation and its licence is automatically lost. And if your personal real estate corporation loses it licence, you will automatically lose your individual licence. If you provide real estate services without a valid licence, you will face discipline.
Make sure that you have not contravened any of the requirements for personal real estate corporations under the Real Estate Services Act and Regulation. The Council strongly advises that any licensee with questions about these requirements should get professional accounting or legal advice.
Learn more about Requirements for Personal Real Estate Corporations.
To take advantage of the potential tax benefits of a personal real estate corporation, you must maintain two real estate licences — one for yourself, and one for the personal real estate corporation.
You must be certain that you are appropriately licensed before you do any of the following:
- advertise as a personal real estate corporation,
- provide real estate services through a personal real estate corporation, or
- receive any commissions or other remuneration through a personal real estate corporation.
If a personal real estate corporation is unlicensed, both you and your managing broker can face discipline — so make sure that you’ve kept both licences up to date. Use the Licensee Search — will open in a new tab on the Council’s website to check on the status of your licences.
Managing brokers — before you approve the payment of any remuneration to a personal real estate corporation, make sure you are satisfied that it is appropriately licensed.
Learn more about Personal Real Estate Corporations and Remuneration.
The Council has a useful online Guide to Personal Real Estate Corporations that answers many of the common questions about personal real estate corporations and includes a step-by-step guide to licensing. We recommend that anyone thinking of incorporating and licensing a personal real estate corporation read it carefully.
Then, get independent professional legal and accounting advice to help you understand whether a personal real estate corporation is the right choice for you — and if it is, how to make sure you satisfy all the ongoing legal requirements.
This information is provided to you by the Real Estate Council of British Columbia (RECBC).
Your feedback is always welcome and can be sent to [email protected].