Why a firm needs a qualifying broker
A corporation cannot hold a fiduciary duty; a person can. So Georgia makes one licensed individual answerable for everything the firm does.
O.C.G.A. 43-40-10 conditions a firm broker's license on designating an individual licensed as a broker as the qualifying broker, and on authorizing that person to bind the firm to any settlement of a contested case. Under 43-40-18(e), a corporation's qualifying broker must be an officer of the corporation.
A salesperson can never fill the role, and sitting on the board without a broker's license fails the central requirement. Nothing requires two brokers among the stockholders. What the statute does require is that the broker or qualifying broker have signatory power on all trust accounts the firm maintains, and that a sole proprietorship be owned entirely by a licensed broker.
The supervision defense has three elements
O.C.G.A. 43-40-18(b) holds a broker responsible for an affiliate's violations unless the broker shows all three of the following together:
- Reasonable procedures for supervising the affiliate were in place.
- The broker did not participate in the violation.
- The broker did not ratify it.
Written policies satisfy only the first element. Approving the conduct afterward is ratification, which destroys the defense no matter how good the policies were.
Delegation is permitted under 43-40-18(d), but the broker remains responsible for the acts of the person to whom the duty was delegated. And O.C.G.A. 43-40-30.1 leaves the employee-versus-independent-contractor choice to the licensees while expressly making it irrelevant to the broker's regulatory responsibility, so an independent contractor agreement is no shield.
Losing a qualifying broker
Rule 520-1-.07(3) gives a partnership, LLC or corporation 60 days to secure a new qualifying broker when the qualifying broker dies, resigns or is discharged unexpectedly. If it does not, the firm must cease all brokerage activity.
During those 60 days the firm may designate a member to sign filings and disburse trust funds as existing contracts require. That is an interim step, not a permanent substitute. There is no 30-day window here and no automatic revocation.