Middleton real estate definitions Exam
Questions and Answers 100% Pass
Brokers Lincense - ✔✔Person or company names 3 years as a sales person must make 6
sales per year as a minimum plus 90 hours of education
Associate broker's license - ✔✔always goes to a person must work for broker
Principal associate broker - ✔✔owner, partner, officer, or member there can be more
than one principal associate broker not allowed to transfer
Non-principal associate broker - ✔✔not the owner partner officer or member only
allowed to have one. they can transfer
Sales person license - ✔✔Only to one person. Must work for a broker. they are allowed
to transfer. Everything they do is in the brokers name must have 40 hours of class and
pass the state exam. must be at least 18
Independent contractor - ✔✔Sales people can be independent contractors. must have
contract with broker agreeing to pay own taxes (30%) 75% of their income is real estate
transaction they receive a 1099 at the end of the year.
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,Employee - ✔✔They receive a W2 from employer and the employer with holds taxes
from each check and unemployment tax
Sole Proprietor - ✔✔1 owner
Partnership - ✔✔Only requires 1 person
Must have at least one principal asso. broker to run entity
General Partnership - ✔✔All partners are general partners have 100% liability each
All general partners should be principal asso. broker
Limited Partnership - ✔✔Entity is the broker
At least one limited partner
limited partner can only lose the money they put into the company
Limited Liability Partnership - ✔✔Members liability is limited to their own acts and
participation ways to get around IRS
Corporation - ✔✔The entity is the broker. Corporation obtains the broker license must
have 1 active licensed officer 1 principal asso. broker all active officers in real estate
shall be principal asso. broker
Limited Liability Company - ✔✔Brokers license is in the of the entity, 1 active principal
asso. broker
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 2
, Shall - ✔✔Must by law
Should - ✔✔Preferred by law
May - ✔✔With legal permission
Can - ✔✔Legal ability
Statute of frauds - ✔✔Is a law that requires certain contracts to be in writing. to be
enforced in court of law anything that conveys interest in real estate anything that takes
more than a year to complete
Parol evidence rule - ✔✔prohibits oral testimony from being used to add to subtract
from or to contract orally unless you can prove fraud
Statute of limitations - ✔✔Sets limit on having legal recourse against another
Laches - ✔✔A case can be dismissed when someone acts unreasonable when bringing
about a case causing undue hardship
Sherman anti-trust act - ✔✔This law prohibits interference in the free flow of trade and
commerce such as price fixing boycotting territorial restrictions and tying agreements.
felony up to $100,000 dollar fine plus 3 years in jail
Agency - ✔✔Relationship between one party called a principal another party called an
agent
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 3
Questions and Answers 100% Pass
Brokers Lincense - ✔✔Person or company names 3 years as a sales person must make 6
sales per year as a minimum plus 90 hours of education
Associate broker's license - ✔✔always goes to a person must work for broker
Principal associate broker - ✔✔owner, partner, officer, or member there can be more
than one principal associate broker not allowed to transfer
Non-principal associate broker - ✔✔not the owner partner officer or member only
allowed to have one. they can transfer
Sales person license - ✔✔Only to one person. Must work for a broker. they are allowed
to transfer. Everything they do is in the brokers name must have 40 hours of class and
pass the state exam. must be at least 18
Independent contractor - ✔✔Sales people can be independent contractors. must have
contract with broker agreeing to pay own taxes (30%) 75% of their income is real estate
transaction they receive a 1099 at the end of the year.
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 1
,Employee - ✔✔They receive a W2 from employer and the employer with holds taxes
from each check and unemployment tax
Sole Proprietor - ✔✔1 owner
Partnership - ✔✔Only requires 1 person
Must have at least one principal asso. broker to run entity
General Partnership - ✔✔All partners are general partners have 100% liability each
All general partners should be principal asso. broker
Limited Partnership - ✔✔Entity is the broker
At least one limited partner
limited partner can only lose the money they put into the company
Limited Liability Partnership - ✔✔Members liability is limited to their own acts and
participation ways to get around IRS
Corporation - ✔✔The entity is the broker. Corporation obtains the broker license must
have 1 active licensed officer 1 principal asso. broker all active officers in real estate
shall be principal asso. broker
Limited Liability Company - ✔✔Brokers license is in the of the entity, 1 active principal
asso. broker
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 2
, Shall - ✔✔Must by law
Should - ✔✔Preferred by law
May - ✔✔With legal permission
Can - ✔✔Legal ability
Statute of frauds - ✔✔Is a law that requires certain contracts to be in writing. to be
enforced in court of law anything that conveys interest in real estate anything that takes
more than a year to complete
Parol evidence rule - ✔✔prohibits oral testimony from being used to add to subtract
from or to contract orally unless you can prove fraud
Statute of limitations - ✔✔Sets limit on having legal recourse against another
Laches - ✔✔A case can be dismissed when someone acts unreasonable when bringing
about a case causing undue hardship
Sherman anti-trust act - ✔✔This law prohibits interference in the free flow of trade and
commerce such as price fixing boycotting territorial restrictions and tying agreements.
felony up to $100,000 dollar fine plus 3 years in jail
Agency - ✔✔Relationship between one party called a principal another party called an
agent
Disclaimer: Original Content, No Copyright Infringement, All Rights Reserved © 2025 3
