What is a necessary action for Broker B to achieve liability protection while operating XYZ Realty as an LLC?

To achieve liability protection while operating XYZ Realty as an LLC, obtaining a business entity license for XYZ Realty is essential. By formally registering the real estate business as a Limited Liability Company (LLC), Broker B ensures that the business is recognized as a separate legal entity. This separation helps protect personal assets from business liabilities, meaning that if the business encounters legal issues or debts, Broker B's personal assets typically cannot be pursued to satisfy those obligations.

Forming an LLC creates a legal barrier that helps to limit the personal liability of the owner, which is one of the primary benefits of this business structure. Without this formal establishment, any business activities conducted by Broker B could expose them to greater financial risk or personal liability if something were to go wrong.

The other options do not specifically address the liability protection that comes from establishing the LLC. For example, registering with the local real estate board, hiring additional staff, or securing a physical office location may be important operational decisions for the brokerage but do not inherently provide the legal protections that come from forming and licensing the LLC.