Sec. 1101.355. ADDITIONAL GENERAL ELIGIBILITY REQUIREMENTS FOR BUSINESS ENTITIES; REGISTRATION OF CERTAIN BUSINESS ENTITIES. (a) To be eligible for a license under this chapter, a business entity must: (1) designate one of its managing officers as its broker for purposes of this chapter; and (2) provide proof that the entity maintains errors and omissions insurance with a minimum annual limit of $1 million for each occurrence if the designated broker owns less than 10 percent of the business entity. (b) A business entity may not act as a broker unless the entity's designated broker is a licensed individual broker in active status and good standing according to the commission's records. (b-1) In determining whether a designated broker is in good standing under this section, the commission may consider: (1) the disciplinary history of: (A) the broker; or (B) any business entity for which the broker serves or previously served as a designated broker; and (2) the payment status of any amount owed to the commission by: (A) the broker; or (B) any business entity for which the broker serves or previously served as a designated broker. (c) A business entity that receives compensation on behalf of a license holder must be licensed as a broker under this chapter. (d) Notwithstanding Subsection (c) or any other law, a business entity is not required to be licensed under this chapter if the business entity: (1) receives compensation on behalf of a broker or sales agent licensed under this chapter that is earned by the license holder while engaged in real estate brokerage; (2) performs no other acts of a broker; (3) is: (A) a limited liability company as defined by Section 101.001 , Business Organizations Code; or (B) an S corporation as defined by 26 U.S.C. Section 1361; (4) is registered with the commission; and (5) is at least 51 percent owned by the license holder on whose behalf the entity receives compensation. (e) The commission shall adopt rules providing for the registration of a business entity described by Subsection (d).
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