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 Kentucky Nondisclosure and Commission Agreement between a business broker and a prospective buyer is a legal document that protects the confidentiality of information shared between the two parties during the process of buying or selling a business. It is intended to safeguard any proprietary, sensitive, or confidential information exchanged by the business owner or broker and the potential buyer during their negotiation and due diligence process. This agreement is crucial as it prevents the prospective buyer from using any of the disclosed information for purposes other than evaluating the potential acquisition. It prohibits the buyer from disclosing or discussing the provided information with any third parties that are not directly involved in the transaction, ensuring the confidentiality of the business's trade secrets, financial records, client lists, marketing strategies, and other confidential information. The agreement also addresses the issue of commission, stating the terms and conditions under which the business broker will be compensated for their services. This may include a commission percentage based on the final sale price or a flat fee. Additional provisions included in the Kentucky Nondisclosure and Commission Agreement may include: 1. Non-circumvention: This clause ensures that the prospective buyer will not bypass the business broker and negotiate directly with the seller. It also prohibits the buyer from attempting to contact the seller's employees, suppliers, or customers without the broker's involvement. 2. Non-solicitation: This clause prevents the prospective buyer from soliciting or attempting to hire any of the business's employees or contractors during the negotiation process or for a specific period after the transaction is completed. 3. Return or destruction of information: This provision requires the buyer to return or destroy any confidential information provided by the seller or broker upon completion of the transaction or termination of negotiations. 4. Governing law: The agreement may specify that it is governed by the laws of Kentucky, establishing the jurisdiction where any disputes will be resolved. 5. Indemnification: This clause outlines the responsibilities of each party regarding any losses, damages, or liabilities arising from a breach of the agreement or misrepresentation of information. It is important to note that there may be different types of Kentucky Nondisclosure and Commission Agreements between business brokers and prospective buyers, each tailored to the specific needs of the parties involved or the nature of the transaction. These agreements may vary in length, included provisions, and commission structures depending on the complexity and size of the business being bought or sold.
