The definition of a "real estate broker" under the California Real Estate Law encompasses much more than simply selling real estate.   For example, Business & Professions Code Section 10131.3 defines a real estate broker as "a person who, for another or others, for compensation or in expectation of compensation, issues or sells, solicits prospective sellers or purchasers of, solicits or obtains listings of, or negotiates the purchase, sale, or exchange of securities as specified in Section 25206 of the Corporations Code".   Section 25206 of the Corporations Code exempts a person licensed by the Real Estate Commissioner when engaged in transactions in interests in certain unincorporated real estate entities.

Not all real estate entities are covered by Section 25206.  Significantly, corporations are excluded.  They also must be owned beneficially by no more than 100 persons (with spouses being counted as one person) and be formed for the sole purpose of, and engaged solely in, investment in or gain from an interest in real property, including, but not limited to, a sale, exchange, trade, or development.  For the Commissioner of Corporations' view of what constitutes a real estate entity subject to this exemption, see Release 62-C.

Licensed securities broker-dealers selling interests in unincorporated real estate entities are not also subject to licensing as real estate brokers because Section 10131.3 provides that it does not apply to a broker-dealer or agent of a broker-dealer licensed by the Commissioner of Business Oversight [sic] under the provisions of the Corporate Securities Law of 1968.