The term "business broker" is casually used to refer to anyone who introduces people who want to buy a business to those who want to sell, and when there is an interest between a buyer and seller in a possible transaction, helps them to arrive at an agreement and to successfully complete a deal for transfer of the business from seller to buyer. The legal definition is an individual who is licensed by his or her state to perform the work of business broker, having passed a background check (with no criminal past) and having passed the state's broker exam designed to test applicants' knowledge of the laws and the best practices pertaining to the profession.
Some people we call business brokers may be licensed as agents, having passed a less comprehensive exam and satisfying less stringent requirements than those associated with licensed brokers. In most states, an agent must be formally supervised by a broker in order to legally engage in the profession. In most states, a business brokerage --owned and managed by a licensed business broker - and perhaps employing agents, is legally permitted to also represent parties in the sale and leasing of residential and commercial real estate.
In most states, there is no legal difference between a real estate broker and business broker, although a few states require a business broker to have specialized education demonstrated by passing a business broker exam - not needed by someone who is engaged only in facilitating real estate transaction.
Most states allow attorneys who do not have real estate licenses to act as business brokers.
Another term for this profession is "business sales intermediary." Anyone legally permitted to list businesses for sale and to represent buyers in business transactions, and to receive a fee for these services, is considered a business sales intermediary.
Anyone dealing with a licensed business broker should understand that he or she is authorized to represent you as a buyer or seller in a transaction involving transfer of business assets, such as equipment, trade name, customer list and leasehold interests. Selling a business by transferring stock, however, might require a Series 7 license typically held by stockbrokers. There are exceptions to this rule, however, and the laws governing these activities are currently being studied by Congress and may be modified.
