Current through Register Vol. 50, page 114, March 25, 2024
(1) If a "business broker" as defined in subsection (2) below is involved in the sale of a business that results in a securities transaction, the business broker is exempt from registration as a broker-dealer and the agents for the business broker are exempt from registration as agents of the issuer if all the following conditions apply:
(a) In marketing a business, the business broker only advertises to potential buyers that the "business" is for sale;
(b) The business broker does not advise either the buyer or seller that the transaction be completed via a sale or purchase of securities;
(c) If the decision is made to conclude the sale of the business via a sale of securities, the sale is made by the buyer and seller or their advisors without the business broker's advice;
(d) After the time, if any, the decision is made that the sale transaction is a securities sale the business broker then has a limited role in the negotiations between or among the parties and merely facilitates the transmittal of information or documents between the buyer and seller, or their advisors;
(e) In no event does the business broker have the authority to make binding agreements on behalf of any party to a securities transaction;
(f) The business broker does not assess the value of any security or equity interest to be sold, but may assess the total value of the assets or the business to be sold as a going concern;
(g) The business broker does not assist the buyer in obtaining financing.
However, the business broker may provide uncompensated introductions to lending sources that the buyer may consider for the transaction. The business broker also may help in completing the paperwork associated with the loan applications for the buyer in order to assist in completing the transaction;
(h) The compensation to be paid to the business broker does not change regardless of the manner in which the sale is concluded (whether asset sale or the sale of securities);
(i) The business broker always advises potential buyers that the business broker does not and may not verify the information given to the business broker about the business;
(j) The business broker also advises potential buyers that the business broker does not make any representation about the accuracy of the information provided regarding any aspect of the business;
(k) The business sold is not a "shell" entity;
(l) The business broker does not handle the transfer of funds from the buyer to a seller, but may accept earnest money from a buyer for deposit with a third party escrow agent; and
(m) The business broker is always subject to the anti-fraud provisions of all state and federal securities acts.
(2) "Business broker," means those brokers who market and facilitate the transfers of businesses from one owner to another owner or group of purchasers formed without the assistance of the business broker.
