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 South Dakota Nondisclosure and Commission Agreement Between Business Broker and Prospective Buyer is a legally binding contract that establishes the terms and conditions for a business broker to disclose confidential information about a business to a prospective buyer, while ensuring the protection of that information and guaranteeing the broker's commission upon a successful business sale. This agreement is critical in maintaining trust and preventing the unauthorized disclosure or misuse of sensitive information, trade secrets, financial data, customer lists, and other proprietary details of the business being sold. The agreement outlines the obligations and responsibilities of both parties involved to safeguard this information and ensure its confidentiality. Some key elements typically included in this agreement are: 1. Parties and Effective Date: Clearly states the names of the business broker and prospective buyer, along with the date on which the agreement becomes effective. 2. Purpose: Outlines the objective of the agreement, which is to establish the terms under which the business broker will disclose confidential information about the business for evaluation by the prospective buyer. 3. Non-Disclosure Obligations: Specifies that the prospective buyer should treat all information received as highly confidential and refrain from disclosing it to any third parties, except as explicitly permitted by the agreement or with the prior written consent of the business broker. 4. Permitted Use: Defines the purpose for which the confidential information can be used, often limited to evaluating the potential purchase of the business and conducting due diligence. 5. Duration and Return of Information: Establishes the duration of the agreement's validity and the prospective buyer's obligation to promptly return or destroy any materials containing confidential information upon the request of the business broker or upon termination of the agreement. 6. Terms of Commission: Sets forth the terms and conditions under which the broker will be entitled to receive a commission upon the successful sale of the business, including the rate or percentage of commission and any additional compensation or reimbursement of expenses. 7. Governing Law and Jurisdiction: Specifies the state laws under which the agreement will be governed and any legal disputes will be resolved. Types of South Dakota Nondisclosure and Commission Agreement Between Business Broker and Prospective Buyer may vary slightly based on specific circumstances, the nature of the business, or the preferences of the parties involved. However, the core elements mentioned above generally remain consistent. It is important for both the business broker and the prospective buyer to carefully review and understand the terms of this agreement before signing, seeking legal advice if necessary, as it is a crucial step in protecting confidential business information and defining the relationship between the parties.
