(Newswire.net — May 4, 2020) —
Those that are starting their own real estate business have to be thoroughly prepared for a lot of things. After all, they’re helping sellers and buyers navigate the complicated process of property transfer and various other transactions. Everything has to be done in accordance with the law, so many have to be aware of the regulations. Being a licensed business is also crucial, as no person will trust a business without the proper credentials to handle private documents and such. There are a few essential legal steps that a real estate business should do but for more in-depth information it’s always recommended to consult a business law firm in Lithuania.
Decide on the legal structure of the business
It’s important to choose a structure that best suits your needs as it has quite a significant impact on a lot of things, most notably taxes, personal assets, day-to-day operations. Most real estate agents work as self-employed business owners that are affiliated with a licensed real estate brokerage. This way, you run an independent business but it’s under supervision.
Or you can open your own brokerage. There are four legal structures one can choose from: sole proprietorship, partnership, limited liability (LLC), or a corporation. It might be hard to decide which one best suits you – seeking the advice of a professional from a business law firm in Lithuania is a viable option. Here’s how each structure works:
- Sole proprietorship. Only one person is responsible for the business, it’s profits and debts. This is the most basic business entity.
- Partnership. Here, two or more people share the responsibility of the business.
- Limited liability company (LLC). Owners are not personally liable for the business. It’s shared among owners, partners or shareholders and includes tax & flexibility benefits of a partnership.
- Corporation. This structure is legally separate from the owners. A corporation can own property, pays taxes, and can be held liable
When it comes to sole proprietorships and partnerships, they are the most accessible business forms for many because they’re easy to form. Companies and corporations require more effort but they have their own distinct benefits. A business law firm in Lithuania can help you choose the legal structure that best suits you and help you register it with the proper legal institutions.
Acquire a license
It doesn’t matter which country you work in, to operate your business legally you have to acquire a real estate license. To work as a realtor you must:
- Take a real estate pre-licensing course. Here you’ll learn all the relevant information and practice methods before taking the exam, after which you’ll get the license. The topics studied include fair housing laws, property ownership types, fiduciary responsibilities, deeds, contracts, and many other things of real estate law.
- Pass the real estate licensing exam. It will cover the topics discussed in the pre-licensing court.
- Submit your real estate license application. After you successfully pass the exam, submit the form to get an official real estate license.
Lawyers from a business law firm in Lithuania advise finding a broker to work for as having your license linked with a licensed brokerage is necessary for agents to start working in this field.
Purchase business insurance
Generally, it’s best to protect your business before you even start it. It usually covers theft, property damage, intellectual property lawsuits, and other incidents. These can seriously drain a small business’s finances, especially for those that specialize in real estate as transactions include larger amounts of money, guidance, and advice.
The clients depend on the expertise of the agent – an unhappy client may try to sue you if they’re not satisfied or if something goes wrong. Choose an insurance plan that protects the business against these possible claims. If you have other agents, a business law firm in Lithuania notes that they have to have worker’s compensation and unemployment insurance, too.
Creating a legally functioning real estate business is not hard, you just have to follow the proper steps that will ensure that everything operates in compliance with the law. The ones mentioned here are just some of the few essential ones. Seeking legal advice from proper lawyers is always recommended as they will help you navigate the complex process of starting a business and guide you in the right direction.