Question

Broker Bill has several agents in his employ. Agent Smith, an "S-Corporation" himself, has his commission checks written out to his "S-Corporation." Because of this, Broker Bill is:
A. relieved of his duties to supervise Agent Smith
B. required to file tax withholding for Agent Smith
C. managing broker over Agent Smith
D. licensed under a corporation and no longer the employing broker

Answer 1

Answer:

C. managing broker over Agent Smith

Explanation:

a managing broker is someone is  held liable over the actions of another broker office or agency that act on the managing broker's behalf. Thse office or agnecy are allowed to act without direct order from the managing broker, but managing broker will be the one that receive all the consequences.

All the profit that is made by managed entity (in this context agent smith) will have to goes to managing broker first and the managing broker will share the profit on a private term with Agent Smith.

In return, the managing broker will have to ensure that all of the agents that he/she has under disposal have to follow the compliance rule that is made by the government. He will manage the licence and annual tests of the agents in order to ensure consumer safety.