A business broker is a person or firm engaged in the business of enabling other businesses to get sold.
Business brokers typically value the business, advertise it for sale, handle the initial
discussions with prospective buyers and assist the owner of the business in selling it. They are paid either a fixed fee or a percentage of the sale price. Buyers sometimes retain a business broker to find them a particular kind of business.
In the United States, licensing of business brokers varies by state, with some states
requiring licenses, some not. Some states require licenses if the broker is commissioned but not if the broker works on an hourly fee basis. State rules also vary about recognizing licensees across state lines, especially for interstate types of businesses like national franchises. Some states require either a broker license or law license to even advise a business owner on issues of sale, terms of sale, or introduction of a buyer to a seller for a fee.
This form is a general Non-Disclosure and Commission Agreement Between a Business Broker and a Prospective Buyer.
A Kansas Nondisclosure and Commission Agreement Between Business Broker and Prospective Buyer is a legally binding contract that establishes the terms and conditions under which a business broker can provide confidential information about a business to a potential buyer. This agreement aims to protect the business owner's proprietary and sensitive information during the sale process. The agreement typically begins with the identification of the parties involved, including the business broker and the prospective buyer. It may also include the name and details of the business being sold, such as its name, location, and industry. Key elements of the agreement include: 1. Non-Disclosure Clause: This clause obligates the prospective buyer to keep all information received about the business strictly confidential. It prohibits the buyer from disclosing or using the privileged information for any purpose other than evaluating the potential acquisition. This clause is crucial to ensure the protection of the business's trade secrets, customer lists, financial records, and other sensitive data. 2. Non-Circumvention Clause: This clause prevents the prospective buyer from bypassing the broker and directly approaching the business owner or other parties involved in the business sale. It ensures that the broker retains exclusive rights to represent the buyer in the transaction and safeguards the broker's commission entitlement. 3. Terms of Access: The agreement may outline the conditions under which the prospective buyer can access the confidential information. These conditions may include restrictions on copying, further distributing, or retaining the information beyond the evaluation period. Additionally, it may specify that the information provided remains the property of the business owner and must be returned or destroyed if the buyer decides not to proceed with the acquisition. 4. Commission and Fees: This section details the broker's commission structure and fee arrangements, including the percentage or fixed amount of the commission payable upon a successful transaction. It may also outline the payment terms and conditions, such as whether the commission is due at closing or upon certain milestones in the sale process. 5. Term and Termination: The agreement specifies the duration of its validity, which is typically for a specific period. It may also include provisions for termination, such as mutual agreement, breach of contract, or completion of the business sale. Different types or variations of Nondisclosure and Commission Agreements may exist in Kansas, depending on the specific needs and preferences of the parties involved. Examples include: — Exclusive Nondisclosure and Commission Agreement: This type of agreement grants exclusive rights to the broker for a predetermined period. It prohibits the prospective buyer from working with any other brokers during the time frame specified in the agreement. — Non-Exclusive Nondisclosure and Commission Agreement: Unlike the exclusive agreement, this type allows the prospective buyer to engage multiple brokers simultaneously. In such a scenario, the broker who successfully closes the deal will be entitled to the commission. — Limited Nondisclosure and Commission Agreement: This type provides specific limitations on the use and disclosure of confidential information. The agreement may restrict the buyer's ability to contact certain employees or competitors, or place additional safeguards on the handling of proprietary information. It is important to understand that the specifics of a Kansas Nondisclosure and Commission Agreement will vary depending on the business broker and the requirements of the business owner. It is advisable for all parties involved to seek legal counsel before entering into any contractual arrangement.
