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Business Law

Business Brokerage Law, Business Intermediary Law, Business Brokerage Legal

Does a business broker need to be concerned with business law?

Traditionally, the business broker provides a conventional full-service, commission-based brokerage relationship under a signed agreement with a seller under a “seller listing” agreement or "buyer representation" agreement with a buyer. In most states, this creates, under common law, an agency relationship with fiduciary obligations. Some states also have business brokerage laws which define and control the nature of the representation and have specific business broker licensing requirements.

Agency relationships in business ownership transactions involve the representation by a business broker of the selling or buying principal, whoever has contracted with the business broker. The business broker then becomes the agent of the principal, who is the broker’s client. The other party in the transaction, who does not have an agency relationship with the broker, is the broker's customer.

Does the ICBC provide training to brokers regarding business intermediary law?

The ICBC does provide to its members, as a part of its education and training services, specific training on business brokerage legal issues.

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