PSI Oklahoma Real Estate Practice Test

According to the Brokerage Relationships Act, how is a "firm" defined?

1. A sole proprietor only

2. A corporation only

3. A partnership only

4. A sole proprietor, corporation, association or partnership

The correct answer is: A sole proprietor, corporation, association or partnership

The definition of a "firm" under the Brokerage Relationships Act is broad and inclusive, encompassing various types of business entities engaged in real estate brokerage. This includes a sole proprietor, which is an individual operating their own business, as well as corporate entities, which are legal structures that can offer limited liability to their owners. Partnerships, where two or more individuals share ownership and responsibilities of a business, and associations, often recognized entities similar to corporations, also fall within this definition. This comprehensive definition allows for flexibility in how real estate businesses are structured and provides clarity on the relationships and responsibilities these entities maintain in the context of real estate transactions. Each type of firm has unique characteristics but is recognized as capable of engaging in brokerage activities according to the law. By including all these forms, the Act ensures that various business structures can operate and be held accountable under the same legal framework, facilitating a more organized real estate market.