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 Massachusetts Nondisclosure and Commission Agreement Between a Business Broker and a Prospective Buyer is a legally binding document that establishes a confidential relationship between the two parties and outlines the terms and conditions under which the broker will provide services to the buyer in the process of acquiring or investing in a business. This agreement ensures the protection of sensitive and proprietary information shared during the negotiation and due diligence process from being disclosed to unauthorized parties. The agreement typically begins with an introduction section, identifying the broker and the buyer, followed by a declaration of intent to work together for the purpose of exploring potential business opportunities. This section may also establish the geographical area within which the broker has the exclusive right to present opportunities to the buyer. The nondisclosure section plays a pivotal role in safeguarding the confidential information exchanged during the course of discussions. It clearly defines what constitutes confidential information and establishes the buyer's obligation not to disclose such information to anyone without prior written consent. This section may include a list of examples of confidential information, such as business plans, financial records, customer data, trade secrets, and patents. The non-circumvention clause prohibits the buyer from directly contacting or entering into any business transactions with the sellers of the businesses presented by the broker without involvement, consent, or compensation to the broker. This clause protects the broker from being bypassed and allows them to receive commissions and fees for their services. The commission section outlines the broker's compensation for their services. It typically includes information about the commission rate, which is often stated as a percentage of the total transaction value or as a fixed fee. This section may also specify whether the commission will be paid by the buyer, the seller, or both, and the circumstances under which the commission is eligible for payment. Some agreements might distinguish between an exclusive agency agreement and a non-exclusive agency agreement. An exclusive agreement grants the broker the sole right to represent the buyer, while a non-exclusive agreement allows the buyer to work with multiple brokers simultaneously. The specific terms and conditions of each arrangement would be outlined within the agreement. Additionally, the agreement may include clauses addressing dispute resolution, attorney's fees, choice of law, and any other terms necessary to protect the interests of both parties. It is important to note that the content and structure of this agreement can vary depending on the broker's preferences, the specific transaction, and the buyer's requirements. Therefore, it is crucial for both parties to thoroughly review and understand the agreement before signing it to ensure compliance, protection, and a mutually beneficial partnership throughout the business acquisition process.A Massachusetts Nondisclosure and Commission Agreement Between a Business Broker and a Prospective Buyer is a legally binding document that establishes a confidential relationship between the two parties and outlines the terms and conditions under which the broker will provide services to the buyer in the process of acquiring or investing in a business. This agreement ensures the protection of sensitive and proprietary information shared during the negotiation and due diligence process from being disclosed to unauthorized parties. The agreement typically begins with an introduction section, identifying the broker and the buyer, followed by a declaration of intent to work together for the purpose of exploring potential business opportunities. This section may also establish the geographical area within which the broker has the exclusive right to present opportunities to the buyer. The nondisclosure section plays a pivotal role in safeguarding the confidential information exchanged during the course of discussions. It clearly defines what constitutes confidential information and establishes the buyer's obligation not to disclose such information to anyone without prior written consent. This section may include a list of examples of confidential information, such as business plans, financial records, customer data, trade secrets, and patents. The non-circumvention clause prohibits the buyer from directly contacting or entering into any business transactions with the sellers of the businesses presented by the broker without involvement, consent, or compensation to the broker. This clause protects the broker from being bypassed and allows them to receive commissions and fees for their services. The commission section outlines the broker's compensation for their services. It typically includes information about the commission rate, which is often stated as a percentage of the total transaction value or as a fixed fee. This section may also specify whether the commission will be paid by the buyer, the seller, or both, and the circumstances under which the commission is eligible for payment. Some agreements might distinguish between an exclusive agency agreement and a non-exclusive agency agreement. An exclusive agreement grants the broker the sole right to represent the buyer, while a non-exclusive agreement allows the buyer to work with multiple brokers simultaneously. The specific terms and conditions of each arrangement would be outlined within the agreement. Additionally, the agreement may include clauses addressing dispute resolution, attorney's fees, choice of law, and any other terms necessary to protect the interests of both parties. It is important to note that the content and structure of this agreement can vary depending on the broker's preferences, the specific transaction, and the buyer's requirements. Therefore, it is crucial for both parties to thoroughly review and understand the agreement before signing it to ensure compliance, protection, and a mutually beneficial partnership throughout the business acquisition process.
