MREC Fictitious Names, LLCs and Advertising Update

Please see below for the recent MREC publication relating to fictitious names, LLCs and advertising. The topics are not new (they relate to the legislation passed in August of 2021 and the new regulations finalized this October).

Rules & Statutes

Missouri DCI sent this bulletin at 12/20/2022 11:34 AM CST

The Missouri Real Estate Commission had the following two legislative changes took effect on August 28, 2021:

• 339.100.2(24) RSMo. “Use of any advertisement or solicitation which:(a)  Is knowingly false, misleading or deceptive to the general public or persons to whom the advertisement or solicitation is primarily directed; or (b)  Includes a name or team name that uses the terms “realty”, “brokerage”, “company”, or any other terms that can be construed to advertise a real estate company other than the licensee or a business entity licensed under this chapter with whom the licensee is associated.  The context of the advertisement or solicitation may be considered by the commission when determining whether a licensee has committed a violation of this paragraph;“
• 339.150(4) RSMo. “Notwithstanding provisions of this chapter to the contrary, a broker may pay compensation directly to a business entity owned by a licensee that has been formed for the purpose of receiving compensation earned by such licensee.  A business entity that receives compensation from a broker as provided for in this subsection shall not be required to be licensed under this chapter and shall be owned: (1)  Solely by the licensee; (2)  By the licensee together with the licensee’s spouse, but only if the spouse and licensee are both licensed and associated with the same broker, or the spouse is not also licensed; or (3)  By the licensee and one or more other licensees, but only if all such owners are licensees which are associated with the same broker. 5.  For purposes of subsection 4 of this section, the following terms shall mean: (1)  “Business entity”, any corporation, partnership, limited partnership, limited liability company, professional corporation, or association; (2)  “Licensee”, any real estate broker-salesperson or real estate salesperson, as such terms are defined under section 339.010.“

Please follow the link for the Commission’s statutes: Missouri Revisor of Statutes – Revised Statutes of Missouri, RSMo Chapter 339

Also, the Missouri Real Estate Commission had the following rule change that took effect on October 30, 2022 in reference to the 339.100.2(24) legislative change:

• 20 CSR 2250-8.070(5) “No licensee or group of licensees shall advertise as a real estate company in any manner, or use any name, team name, or other term that could be construed by members of the public as the advertiser being a real estate partnership, company, brokerage, or business entity, unless the advertiser holds a valid appropriate entity license. (A) Such terms include use of the words realty, brokerage, company, or other terms that may be construed as a real estate entity. (B) The context of the advertisement or solicitation may be considered by the commission when determining whether a licensee has committed a violation. When the licensee’s or group of licensee’s name includes or incorporates the name of the broker/brokerage with whom the licensee or group of licensee’s is currently affiliated, the use of the words realty, brokerage, or company in the licensee’s fictitious name shall not constitute a violation of subsection (5)(A) above when these words are used to refer to or identify the licensee’s affiliation with the broker/brokerage. (C) A licensee or group of licensees that are not entities under Chapter 339, RSMo, who want to advertise with the licensee’s or group’s fictitious name, should file with the secretary of state a registered fictitious name that is owned by the broker/brokerage in which the licensee or group of licensees are affiliated. The registration of a fictitious name with the Missouri Secretary of State’s Office does not exempt a licensee or group of licensees from the requirements of 20 CSR 2250-8.070(3) or subsection (5)(A) above.“

Please follow the link for the Commission’s rules: Missouri Code of State Regulations: Title 20 – Department of Insurance (mo.gov)