So, you want to assist someone with buying or selling a business?
Here are the steps you need to follow:
To register as a business broker in Illinois, you must comply with the Illinois Business Brokers Act of 1995, which is administered by the Illinois Secretary of State. Here's a step-by-step guide:
1. Determine Applicability
• Who Needs to Register: If you act as a business broker, which includes assisting others in buying or selling businesses for compensation, registration is generally required.
• Exemptions: Certain professionals, like attorneys or accountants providing incidental services, may be exempt. Verify if you qualify for an exemption.
2. Prepare the Application
• Form to Use: Obtain and complete the Business Broker Registration Application from the Illinois Secretary of State’s website.
• Information Required:
◦ Your name and contact information (individual or business entity).
◦ Details about your business brokerage practice.
◦ Criminal and financial disclosure information.
3. Pay the Registration Fee
• The registration fee varies but is typically outlined in the application instructions.
• Fees can be paid via check or money order, as specified in the form.
4. Obtain a Surety Bond or Insurance
• Illinois requires business brokers to secure a surety bond or maintain insurance in the amount of $10,000.
• The bond or policy must be issued by a recognized insurer and submitted with your registration.
5. Submit Disclosure Documents
• Business brokers are required to provide disclosure documents to clients. These must be included in the registration packet and comply with statutory requirements.
• The disclosure must include:
◦ Fees and compensation structures.
◦ Potential conflicts of interest.
◦ Terms and conditions of the broker-client relationship.
6. File the Application
• Submit the completed application, fee, and supporting documentation to the:Illinois Secretary of State, Securities Department.
7. Await Approval
• The Secretary of State will review your application. Once approved, you will receive a certificate or confirmation of registration.
8. Maintain Compliance
• Annual Renewal: Registration must be renewed annually, typically with updated information and a renewal fee.
• Client Contracts: Ensure all contracts with clients comply with Illinois law, including clear disclosure of terms.
Additional Considerations:
• If your business broker activities include selling securities (e.g., stock in a company), additional registration with the Illinois Securities Department and potentially the SEC may be required.
You can contact the Illinois Secretary of State, Securities Department at:
Phone: (800) 628-7937
Website: Illinois Secretary of State
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