1 of 10 - Marita tells Alexandra they must obtain their broker-dealer license from the Department of Corporations to engage in the sale of real estate syndicate security interests. Alexandra disagrees with Marita, explaining they both have their broker licenses and that is sufficient. Who is correct and why?
Marita is correct. Section 15632 was added to The Real Estate Syndicate Act requiring real estate brokers to obtain a broker-dealer license.
Alexandra is correct. Section 25206 was added to the Corporations Code making obtaining a broker-dealer license optional.
Marita is correct. Section 25206 has an added provision dealing with brokers violating the Corporations Code and requiring the broker-dealer license.
None of the above
You answered incorrectly
In 1977, Section 25206 was added to the Corporations Code, permitting real estate brokers to engage in the sale of real estate syndicate security interests without having to obtain a broker-dealer license from the Department of Corporations.
2 of 10 - Marita and Alexandra set up a Limited Partnership. Marita is named General Partner and Alexandra is named Limited Partner. Marita embezzles funds from the investors. Is Alexandra liable for Marita's indiscretion?
Alexandra is only liable if she is named as a general partner in the certificate or if she participates in control of the business.
Alexandra is as liable to the investors as Marita. However, unless she was involved in the crime, she is only financially liable.
Alexandra is liable and a partner, whether it be a general or limited partner.
Both B and C
You answered incorrectly
The California Revised Limited Partnership Act says that a limited partner is not liable as a general partner unless that limited partner is also named as a general partner in the certificate of limited partnership or if that limited partner participates in control of the business. So, since Alexandra is not a General Partner, she is not liable.
3 of 10 - This form of syndication avoids double taxation but has a lack of centralized management. Which form fits the description?
The Corporate
The General Partnership
The Joint Venture
Both B and C
You answered correctly
4 of 10 - Alexandra and Marita are forming a real estate syndicate. They have their initial investments and are ready to proceed. What happens next?
Operation, Origination, Completion or Liquidation
Syndication, General Partnership, REIT
Origination, Operation, Completion or Liquidation
Origination, Exemption, Corporation
You answered correctly
5 of 10 - This is the most frequently used organizational form for real estate syndicates. Which form fits the description?
The General Partnership or Joint Venture
The Corporate Form
The Limited Partnership
The Combination
You answered incorrectly
The Limited Partnership offers the Corporate Form's advantages of limited liability and centralized management and the General Partnership Form's tax advantages, resulting in the Limited Partnership being one of the most frequently used organizational forms for real estate syndicates.
6 of 10 - A small group of investors are in the initial stages of putting together a real estate investment trust (REIT). Which of the following is not a qualification?
A REIT must be beneficially owned by at least 100 investors.
The company must distribute at least 85% or more of its income to its shareholders.
Each share of certificate of interest must carry with it an equivalent vote.
No five, or fewer, persons may hold more than 50 percent of the beneficial interests.
You answered incorrectly
One of the legal mandates that must be fulfilled to meet the qualifications for a trust is that the company must distribute at least 90% or more of its income to its shareholders. The REIT must also be owned by at least 100 investors, no five or fewer of whom may hold more than 50% of the interests, and with each share carrying an equivalent vote.
7 of 10 - What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act's inception in 1970?
The Department of Corporations, The California Department of Real Estate, The Department of Corporations
The California Department of Real Estate, The Department of Corporations, Real Estate Commissioner
Real Estate Commissioner, The California Department of Real Estate, The Department of Corrections
Real Estate Commissioner, The California Department of Real Estate, The Department of Corporations
You answered incorrectly
The Real Estate Syndicate Act, under the California Business and Professions Code, went into effect in 1970 and handed the jurisdiction of some non-corporate syndicates from the Department of Corporations to the Department of Real Estate. The Real Estate Syndicate Act was repealed 8 years later, again turning the regulation of ALL REITS to the Department of Corporations, where it remains.
8 of 10 - This form of syndication allows limited liability for the investors but has negative tax features. Which form fits the description?
The General Partnership
The Joint Venture
The Limited Liability Company
The Corporate Form
You answered incorrectly
The Corporate Form of syndication allows for both centralized management and limited liability for the investors but has negative tax features that make it unappealing for modern syndicates.
9 of 10 - Alexandra and Marita's company has qualified as a trust. It has distributed 96% of its income to its shareholders. Which earnings require the payment of federal taxes?
The company only pays federal taxes on the retained earnings.
The company only pays federal taxes on the retained earnings, which are taxed at corporate rates.
The company only pays federal taxes on the distribution to its shareholders.
The company is exempt from federal taxes due to its trust qualification. It is required only to pay state and local taxes.
You answered incorrectly
If a company meets the qualifications for a trust by distributing at lease 90% or more of its income to its shareholders, then that company does not pay federal taxes on that distribution but only on the retained earnings, which are taxed at corporate rates.
10 of 10 - Alexandra and Marita have formed a REIT. They have their investors and resources and are ready for business. The REIT will be investing in an assorted portfolio of real estate and mortgage investments. What type of REIT have Alexandra and Marita formed?
