Professional Corporations, Corporations,
Limited Liability Companies, and
Limited Liability Partnerships

LIMITED LIABILITY COMPANIES

K.S.A. 17-2706 et seq affects real estate brokerage companies which are organized as limited liability companies pursuant to K.S.A. 58-3042. It also affects salespersons and associate brokers who are organized as limited liability companies pursuant to K.S.A. 58-3062(b)(1)(B) [see "Payment of Commissions to Salespersons and Associate Brokers" below].

K.S.A. 17-2709(a) requires that professional limited liability companies filing articles of organization with the Secretary of State's Office to file a certificate issued by the LLC's licensing body prior to issuance of the Certificate of Incorporation. The certificate must specify that each member of the LLC is duly licensed to practice that profession and that the proposed company name has been approved. The purpose clause in the articles of organization must state the specific profession to be exercised by the LLC. These requirements emulate the current law's requirements for professional corporations/associations.

A request by a real estate licensee that a certificate be issued must be directed to the Real Estate Commission, in writing, and must include the name of each member of the LLC and the proposed corporate name.

PAYMENT OF COMMISSIONS TO SALESPERSONS AND ASSOCIATE BROKERS

Prior to October 1, 1997, brokers had to pay commissions to salespersons and associate broker as individuals. The license act was amended to permit payment to the salesperson's or associate broker's professional corporation, corporation, limited liability company, or limited liability partnership. This provision regarding the payment of commissions does not alter any other provisions of the license act.

If a salesperson or associate broker has:

1. organized as a professional corporation pursuant to K.S.A. 17-2706 et seq., and amendments thereto,
2. incorporated under the Kansas general corporation code contained in K.S.A. 17-6001 et seq., and amendments thereto,
3. organized under the Kansas limited liability company act contained in K.S.A. 17-7601 et seq., and amendments thereto, or
4. has organized as a registered limited liability partnership as defined in K.S.A. 56-302 and amendments thereto

the commission or other valuable consideration may be paid by the licensee's broker to such professional corporation, corporation, limited liability company or limited liability partnership. Reference K.S.A. 58-3062(b)(1)(B).

ORGANIZING AS A PROFESSIONAL CORPORATION

A real estate licensee who wants to organize as a professional corporation must file a certificate issued by the Real Estate Commission with the Secretary of State's Office. A request that a certificate be issued must be directed to the Commission, in writing, and must include the name of the licensee, or the names of the licensees, and the proposed corporate name. The request may be faxed to the Commission at (785) 296-1771. The certificate issued by the Commission must specify that each individual is duly licensed to practice that profession and that the proposed corporate name has been approved.