A personal real estate corporation (PREC) is the corporation through which a brokerage may pay commission owed to you, and RECO is explicit that “a PREC is exempt from registration” — it is a payment vehicle, not a second licence.
Ontario. A PREC “cannot trade in real estate” independently — its only function is providing the controlling shareholder’s services to a brokerage, you must remain personally registered with RECO, and “the name of the PREC must not be included in any advertising.” Money flows brokerage → PREC → agent; RECO states the agent must not receive remuneration “from any person or entity other than the personal real estate corporation or the brokerage.”
Alberta. RECA’s equivalent is not a PREC by name — Rule 50(c)(i) lets a brokerage pay commissions to a corporation of which the licensee owns “not less than fifty percent (50%) of the shares”, a majority-stake threshold rather than Ontario’s sole-controlling-shareholder model.
Saskatchewan. SREC calls it a “Professional Corporation” rather than a PREC, and its rules are the most specific of the three: “there can only be one registrant as the controlling individual who owns the voting shares,” non-voting shares may sit with an affiliated person such as a spouse or child, but “a spouse who is also a registrant will have to incorporate his or her own Professional Corporation” — a married couple cannot share one. SREC also charges its own permit fee, renewable annually by December 1st for $200, with a $100 late fee, on top of the individual’s regular licence renewal.
An Ontario agent incorporates a PREC and continues working under their existing brokerage. Every commission the agent generates is still billed by the brokerage as before; the brokerage then pays the agent’s share to the PREC rather than to the agent personally, and the agent draws salary or dividends from the PREC. The agent’s RECO registration does not change — only the corporation is new, and it cannot appear on a listing sign or in any ad copy.
See also: gross commission income and T2125 statement.
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