Statutes > Illinois Statutes > CHAPTER 815 BUSINESS TRANSACTIONS > 815 ILCS 307/ Illinois Business Brokers Act of 1995. > Article 10

Article 10


      (815 ILCS 307/Art. 10 heading)
ARTICLE 10

    (815 ILCS 307/10‑1)
    Sec. 10‑1. Short title. This Article may be cited as the Illinois Business Brokers Act of 1995, and references in this Article to "this Act" mean this Article.
(Source: P.A. 89‑209, eff. 1‑1‑96.)

    (815 ILCS 307/10‑5)
    Sec. 10‑5. Definitions. As used in this Act, unless the context otherwise requires, the terms defined in the Sections of this Act following this Section and preceding Section 10‑6 have the meanings therein ascribed.
(Source: P.A. 89‑209, eff. 1‑1‑96.)

    (815 ILCS 307/10‑5.10)
    Sec. 10‑5.10. Business Broker. "Business Broker" means any person who is required to register under Section 10‑10 of this Act and, in return for a fee, commission, or other compensation:
        (1) promises to procure a business for any person or
     assists any person in procuring a business from any third person;
        (2) negotiates, offers, attempts or agrees to
     negotiate the sale, exchange, or purchase of a business;
        (3) buys, sells, offers to buy or sell or otherwise
     deals in options on businesses;
        (4) advertises or represents himself as a business
     broker;
        (5) assists or directs in the procuring of prospects
     intended to result in the purchase, sale, or exchange of a business;
        (6) offers, promotes, lists or agrees to offer,
     promote, or list a business for sale, lease, or exchange.
(Source: P.A. 89‑209, eff. 1‑1‑96; 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑5.15)
    Sec. 10‑5.15. Business. "Business" means an existing business, goodwill of an existing business, or any interest therein, or any one or combination thereof, where the transaction is not a securities transaction involving securities subject to the Illinois Securities Law of 1953, and wherein the sale or exchange of real estate is not the dominant element of the transaction.
(Source: P.A. 89‑209, eff. 1‑1‑96.)

    (815 ILCS 307/10‑5.16)
    Sec. 10‑5.16. Client. "Client" means any person who has signed an agreement with a business broker that provides for the services described in Section 10‑5.10 for compensation.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑5.17)
    Sec. 10‑5.17. Insolvency. "Insolvency" means the rendering of a business broker financially unable to perform any contractual obligations of its business brokering duties.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑5.18)
    Sec. 10‑5.18. Material. "Material", when used to qualify a requirement for the furnishing of information as to any subject, limits the information required to those matters as to which there is a substantial likelihood that a reasonable person would consider important.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑5.20)
    Sec. 10‑5.20. Person. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a limited liability company, a limited liability partnership, a trust, any unincorporated organization, or any other entity.
(Source: P.A. 92‑308, eff. 1‑1‑02.)

    (815 ILCS 307/10‑5.25)
    Sec. 10‑5.25. Purchaser. "Purchaser" means a person who enters into a contract or agreement for the acquisition of a business or a person to whom an offer to sell a business is directed.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑5.30)
    Sec. 10‑5.30. Seller. "Seller" means a person who sells or offers to sell a business or any agent who directly or indirectly acts on behalf of such person, except that a person acting as a business broker is neither a seller nor purchaser.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑10)
    Sec. 10‑10. Registration of business brokers. Every person engaging in the business of business brokering shall be registered with the Office of the Secretary of State pursuant to the provisions of this Act. Persons employed, contracted by, or working on behalf of other persons who are registered under this Act need not register separately; provided that such non‑registered employed or contracted persons working for a business broker have been identified in the registration submitted and proper fees, if any, are paid.
    (a) In order to be registered under this Act, a business broker shall file an application for registration with the Secretary of State. The application for registration shall contain, to the extent reasonably available to the applicant:
        (1) the disclosure document required under
     subsection (b) of Section 10‑30 of this Act and the form of disclosure statement proposed to be used under subsection (b)(1) of Section 10‑30 of this Act;
        (2) consent to service of process under subsection
     (d) of this Section;
        (3) a fee in the amount as provided for in
     subsection (a) of Section 10‑25 of this Act, and shall not be returnable in any event; and
        (4) any other information deemed necessary by the
     Secretary of State as prescribed by rule or regulation.
    (b) Whenever the provisions of this Act have been complied with, the Secretary of State shall issue a certificate of registration to the applicant, authorizing the applicant to engage in the business of business brokering.
    (c) An application for registration becomes effective 30 days after it is filed, unless an order of the Secretary of State establishes an earlier effective date. Every registration is effective until January 1 of the year after it goes into effect.
    (d) Every applicant for registration shall file with the Secretary of State, in such form as the Secretary of State may prescribe by rule or regulation, an irrevocable consent appointing the Secretary of State to be the applicant's agent to receive service of any process in any noncriminal suit, action, or proceeding against the applicant arising from the violation of any provision of this Act.
    (e) The Secretary of State shall maintain a record, which shall be open for public inspection, upon which shall be entered the name and address of each business broker and all orders of the Secretary of State denying, suspending, or revoking registration. The Secretary of State may designate by rule or order any statements, information, or reports submitted to or filed with him or her pursuant to this Act which the Secretary of State determines are of a sensitive nature and therefore should be exempt from public disclosure. Any statement, information, or reports determined by the Secretary of State to be of a sensitive nature shall not be disclosed to the public except upon consent of the person filing or submitting the statement, information, or reports or by order of a court or in court proceedings.
(Source: P.A. 90‑70, eff. 7‑8‑97; 91‑357, eff. 7‑29‑99.)

    (815 ILCS 307/10‑20)
    Sec. 10‑20. Renewal of registration.
    (a) A business broker may not continue engaging in the business of business brokering unless the broker's registration is renewed annually. A business broker shall renew the registration by filing with the Secretary of State, at least 30 days before the expiration of the registration, an application containing any information the Secretary of State may require to indicate any material change from the information contained in the applicant's original application or any previous application.
    (b) An application for renewal must be accompanied by a filing fee in the amount specified in subsection (a) of Section 10‑25 of this Act, and shall not be returnable in any event.
    (c) Notwithstanding the foregoing, applications for renewal of registration of business brokers may be filed within 30 days following the expiration of the registration provided that the applicant pays the annual registration fee together with an additional amount equal to the annual registration fee and files any other information or documents that the Secretary of State may prescribe by rule or order. Any application filed within 30 days following the expiration of the registration shall be automatically effective as of the time of the earlier expiration provided that the proper fee has been paid to the Secretary of State.
(Source: P.A. 92‑308, eff. 1‑1‑02.)

    (815 ILCS 307/10‑25)
    Sec. 10‑25. Fees and funds. All fees and funds accruing for the administration of this Act shall be accounted for by the Secretary of State and shall be deposited with the State Treasurer who shall deposit them in the Securities Audit and Enforcement Fund.
    (a) The Secretary of State shall, by rule or regulation, impose and collect fees necessary for the administration of this Act, including but not limited to, fees for the following purposes:
        (1) filing an application pursuant to Section 10‑10
     of this Act;
        (2) examining an application pursuant to Sections
     10‑10 and 10‑20 of this Act;
        (3) registering a business broker under Section
     10‑10 of this Act;
        (4) renewing registration of a business broker
     pursuant to Section 10‑20 of this Act;
        (5) failure to file or file timely any document or
     information required under this Act;
        (6) (blank);
        (7) acceptance of service of process pursuant to
     Section 10‑125;
        (8) issuance of certification pursuant to Section
     10‑50; and
        (9) late registration fee pursuant to Section
     10‑20(c).
    (b) The Secretary of State may, by rule or regulation, raise or lower any fee imposed by, and which he or she is authorized by law to collect under, this Act.
(Source: P.A. 91‑194, eff. 7‑20‑99; 91‑534, eff. 1‑1‑00; 91‑809, eff. 1‑1‑01; 92‑308, eff. 1‑1‑02.)

    (815 ILCS 307/10‑30)
    Sec. 10‑30. Disclosure document to be provided by business broker.
    (a) A business broker must provide a written disclosure document that meets the requirements set forth in subsection (b) of this Section to a client at the time or before the client signs a contract for the services of a business broker or at the time or before the business broker receives any consideration upon the contract. Any person who signs a contract for the services of a business broker shall have 7 days from the date of signing of the contract to rescind the contract and receive a refund of all payments, if any, made by that person.
    (b) A written disclosure document shall contain the following information:
        (1) A disclosure statement which shall be the cover
     sheet and shall be entitled, in at least 10‑point boldface capital letters "DISCLOSURES REQUIRED BY LAW". Under this title shall appear the statement, in at least 10 point type that "THE SECRETARY OF STATE HAS NOT REVIEWED AND DOES NOT APPROVE, RECOMMEND, ENDORSE, OR SPONSOR ANY BUSINESS BROKERAGE CONTRACT. THE INFORMATION CONTAINED IN THIS DISCLOSURE HAS NOT BEEN VERIFIED BY THE SECRETARY OF STATE. IF YOU HAVE ANY QUESTIONS, SEE AN ATTORNEY BEFORE YOU SIGN A CONTRACT OR AGREEMENT." Nothing except the title and the required statement shall appear on the cover sheet, except that the name of the business broker, address, telephone number, facsimile number, and any other information as authorized by the Secretary of State by rule may appear on the cover sheet.
        (2) The name and form of organization of the
     business broker, the names under which the business broker has done or is doing business, and the name of any parent organization or affiliate of the business broker.
        (3) The names, addresses, and titles of the business
     broker's officers, directors, trustees, general partners, general managers, principal executives, and any other person performing similar duties.
        (4) A full and detailed description of the actual
     services that the business broker undertakes to perform for the client.
        (5) A specific statement of the circumstances under
     which the business broker will be entitled to obtain or retain consideration from the party with whom the business broker contracts.
        (6) Any other information the Secretary of State may
     require by rule or regulation.
    (c) A business broker shall amend the disclosure document required by subsection (b) of this Section whenever necessary to prevent it from containing any false or misleading statement of a material fact and shall deliver a copy of the amended disclosure document to the Secretary of State on or before the date of the amendment.
    (d) The information in subdivisions (b)(4) and (b)(5) of this Section need not be set out on the disclosure document if the business broker's contract contains the information required in subdivisions (b)(4) and (b)(5) of this Section and is provided with the disclosure document.
(Source: P.A. 89‑209, eff. 1‑1‑96; 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑30.5)
    Sec. 10‑30.5. Exemptions from disclosure requirements. Section 10‑30 shall not apply if:
    (a) the client to be represented by the business broker is:
        (1) a natural person who has, or is reasonably
     believed by the business broker relying upon this Section to have, a net worth or joint net worth with that person's spouse in excess of $1,000,000 at the time of the execution of the business broker agreement or contract;
        (2) a natural person who has, or is reasonably
     believed by the business broker relying upon this Section to have, an income or joint income with that person's spouse in excess of $200,000 in the most recent fiscal year;
        (3) a company, business, or other non‑natural person
     that has, or is reasonably believed by the business broker relying upon this Section to have, a total asset value in excess of $1,000,000 and has been in existence for at least nine months and was not formed for the purpose of the subject transaction;
        (4) a company, business, or other non‑natural person
     that has, or is reasonably believed by the business broker relying upon this Section to have, gross revenues or gross sales in excess of $200,000 in the most recent fiscal year and has been in existence for at least nine months and was not formed for the purposes of the subject transaction; or
        (5) a company, business, or other non‑natural person
     in which at least 90% of the equity interest is owned, or is reasonably believed by the business broker relying upon this Section to be owned, by persons who meet any of the tests set forth in subdivisions (a)(1), (a)(2), (a)(3), (a)(4), or (a)(5) of this Section; or
    (b) the client to be represented by the business broker has had an attorney review the business broker's contract for the client.
(Source: P.A. 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑35)
    Sec. 10‑35. Contracts required to be in writing; retention of copy by client. To be enforceable, every contract for the services of a business broker shall be in writing and signed by all contracting parties. The client shall have the right to retain a copy of the signed contract for the services of a business broker. The client's copy of the contract shall be provided to the client when the contract is signed, if that is reasonably feasible and the client so requests. Otherwise, the contract shall be mailed or otherwise sent to the client within one week of execution. No account number, as referred to in Section 10‑75 of this Act, is required on the client's copy of the contract.
(Source: P.A. 89‑209, eff. 1‑1‑96; 90‑70, eff. 7‑8‑97.)

    (815 ILCS 307/10‑40)
    Sec. 10‑40. Denial, suspension or revocation of registration; orders and hearing.
    (a) The Secretary of State may deny, suspend or revoke the registration of a business broker if the business broker:
        (1) Is insolvent.
        (2) Has violated any provision of this Act.
        (3) Has filed with the Secretary of State any
     document or statement containing any false representation of a material fact or omitting to state a material fact.
        (4) Has been convicted, within 10 years before the
     date of the application, renewal or review, of any crime involving fraud or deceit.
        (5) Has been found by any court or agency, within 10
     years before the date of the application, renewal, or review, to have engaged in any activity involving fraud or deceit.
    (b) The Secretary of State may not enter a final order denying, suspending, or revoking the registration of a business broker without prior notice to all interested parties, opportunity for a hearing and written findings of fact and conclusions of law. The Secretary of State may by summary order deny, suspend, or revoke a registration pending final determination of any proceeding under this Section. Upon the entry of a summary order, the Secretary of State shall promptly notify all interested parties that it has been entered, of the reasons for the summary order and, that upon receipt by the Secretary of State of a written request from a party, the matter will be set for hearing which shall be conducted in accordance with the provisions of the Illinois Administrative Procedure Act. If no hearing is requested within 30 days of the date of entry of the order and none is ordered by the Secretary of State, the respondent's failure to request a hearing shall constitute an admission of any facts alleged therein and shall constitute a sufficient basis to make the order final and it shall remain in effect until it is modified or vacated by the Secretary of State. If a hearing is requested or ordered, the Secretary of State, after notice of the hearing has been given to all interested persons and the hearing has been held, may modify or vacate the order or extend it until final determination.
(Source: P.A. 92‑308, eff. 1‑1‑02.)

    (815 ILCS 307/10‑45)
    Sec. 10‑45. Powers of Secretary of State; privilege against self‑incrimination; admissibility into evidence.
    (a) The Secretary of State may do the following:
        (1) Adopt rules and regulations to implement this
     Act.
        (2) Conduct investigations and examinations:
            (A) in connection with any application for
         registration of any business broker or any registration already granted; or
            (B) whenever it appears to the Secretary of
         State, upon the basis of a complaint or information, that reasonable grounds exist for the belief that an investigation or examination is necessary or advisable for the more complete protection of the interests of the public.
        (3) Charge as costs of investigation or examination
     all reasonable expenses, including a per diem prorated upon the salary of any employee and actual traveling and hotel expenses. All reasonable expenses are to be paid by the party or parties under investigation or examination.
        (4) Issue notices and orders, including cease and
     desist notices and orders, after making an investigation or examination under paragraph (2) of subsection (a) of this Section. The Secretary of State may also bring an action to prohibit a person from violating this Act. The Secretary of State shall notify the person that an order or notice has been issued, the reasons for it and that a hearing will be set in accordance with the provisions of the Illinois Administrative Procedure Act after the Secretary of State receives a written request from the person requesting a hearing.
        (5) Sign all orders, official certifications,
     documents or papers issued under this Act or delegate the authority to sign any of those items to his or her designee.
        (6) Hold and conduct hearings.