Buying/Selling a Business

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