Payment of Commissions to Salesperson’s Corporation or Limited Liability Company

Many of our agents would like to receive the commission payable to their Corporation or Limited Liability Company. We have finally received an explanation from the BRE and IRS regarding the correct legal method of doing this.

Alliance Bay Realty may pay commissions to our agent’s Corporation or Limited Liability Company when all the requirements below are met:

1) The agent’s Corporation or Limited Liability Company must be owned solely by our agent.
2) An agent must present the following to the broker:
a) Corporation or Limited Liability Company W-9 form.
b) Notarized letter (sample below) stating that the Corporation or Limited Liability Company is owned solely by him/her and that he/she is requesting the commission be paid to his/her Corporation or Limited Liability Company.

Please note that the agent’s Corporation or Limited Liability Company can’t be involved in a real estate transaction. In a real estate transaction, the agent may act only as an individual person. This is because only he/she has a DRE license, is affiliated with Alliance Bay Realty and is permitted to represent a buyer or seller in a real estate transaction

Sample Letter

To: Alliance Bay Realty

John Smith, being duly sworn, deposes and says:

1. I am a duly licensed salesperson affiliated with Alliance Bay Realty
2. I have formed a legal entity under the name of (John Smith, Inc)
3. John Smith, Inc. is not licensed as a real estate brokerage.
4. I am an owner of John Smith Inc.
5. I request that all future commissions payable to me, earned in my capacity as a salesperson with Alliance Bay Realty be paid to John Smith, Inc.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

John Smith ____________________

Date__________________________

CalBRE#_______________________