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.
Phoenix, Arizona Nondisclosure and Commission Agreement Between Business Broker and Prospective Buyer Introduction: A Nondisclosure and Commission Agreement is a legally binding document that outlines the terms and conditions of confidentiality and commission payment between a business broker and a prospective buyer. In the context of Phoenix, Arizona, where there is a thriving business environment, such agreements are crucial to protect the interests of all parties involved. Key Terms and Clauses: 1. Confidentiality: The agreement establishes strict provisions to ensure the confidentiality of all sensitive information exchanged during the business transaction process. This includes financial records, customer databases, trade secrets, operational practices, and any other proprietary information related to the business being sold. 2. Non-Compete Clause: This clause prohibits the prospective buyer from engaging in any competitive activity in the same industry or geographic location if the transaction is successful. It aims to safeguard the interests of the seller and prevents the prospective buyer from using the acquired information to gain an unfair advantage in the market. 3. Non-Solicitation Clause: This clause prevents the prospective buyer from soliciting the employees, clients, or customers of the business being sold. It ensures that the relationships and goodwill established by the seller are protected and not exploited by the buyer. 4. Commission Agreement: This section outlines the commission structure and payment terms for the business broker facilitating the transaction. The commission is usually a percentage of the final sale price and may be payable upon closing or in installments as agreed upon. Types of Phoenix, Arizona Nondisclosure and Commission Agreements: 1. Standard Nondisclosure and Commission Agreement: This is the most common form of agreement used for business transactions in Phoenix, Arizona. It encompasses all the key terms and clauses mentioned above and serves as the foundation for protecting sensitive information and establishing the commission structure. 2. Exclusive Nondisclosure and Commission Agreement: In certain cases, a business broker and a prospective buyer may opt for an exclusive agreement. This means that the broker is granted exclusive rights to represent and negotiate on behalf of the buyer in the acquisition process. It often comes with additional terms and conditions to ensure the buyer's commitment and dedication towards the transaction. 3. Limited Nondisclosure and Commission Agreement: Sometimes, a seller may prefer to limit the scope of confidentiality to specific aspects or categories of information. In such cases, the agreement is tailored accordingly, allowing the buyer access only to the disclosed information while still maintaining confidentiality for the undisclosed details. Conclusion: A Nondisclosure and Commission Agreement is an essential legal instrument for business transactions in Phoenix, Arizona. Its purpose is to protect sensitive information, establish clear terms of confidentiality, prevent unfair competition, and ensure the business broker receives proper compensation for their services. Depending on the specific needs of the parties involved, there are different types of agreements, such as the standard, exclusive, and limited nondisclosure and commission agreements.
