Finder’s Fee Agreement (Sale of Shares)
Under this Finder’s Fee Agreement (Sale of Shares), a company can appoint an intermediary, the “finder” who is sometimes called a “business broker”, to identify and introduce to the company one or more potential buyers of all of the shares of the company. (The company makes the appointment on behalf of all of the shareholders.)
As and when the finder introduces any potential buyer/s and it or they then proceed to buy the shares, the finder becomes entitled to a commission (the “finder’s fee”) payable by the company (and repayable to it by the shareholders pro rata to their percentage holding) in return for that successful introduction.
The terms of this document set out the detailed terms of the engagement and are fairly even-handed in the way in which they protect and clarify the position of both the company and the finder. This template is therefore suitable for use where either:
· all of the shareholders are looking to sell their shares and the company wishes to appoint a finder of buyers for that purpose; or
· an entity whose business is to find potential buyers of shares wishes to be appointed as a finder on its own standard terms of business.
However, certain provisions in the template slightly favour the finder so that it is particularly suited to being used by a finder as its standard appointment document.
This form of agreement can be used for appointment of a finder on an exclusive basis, i.e. where the company is willing to appoint only one finder to act for it. Alternatively, this form can be used on a non-exclusive basis, i.e. where the company wants to have the freedom to appoint one or more other intermediaries in addition to the finder. By selecting one of the alternative sets of wording in the form, you can easily render the appointment either exclusive or non-exclusive.
This template also contains some optional provisions which can be included where the company engages the finder not only to find a buyer in return for the finder’s fee commission, but also where the company wishes to put the finder on a monthly retainer fee. The retainer is as well as the finder’s commission and it is payable in return for the finder providing additional services (e.g. help with negotiation) to smooth the way to a successful sale of all of the shares.
There are provisions in the template covering alternative means of setting the amount of commission payable, advertising by the finder, expenses, confidentiality, anti-bribery, data processing, details of the shareholders who are looking to sell all of the shares in the company and other useful clauses.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This Finder’s Fee Agreement (Sale of Shares) is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
If the subject matter of a sale is not the shares of a company, but instead all of the business and assets of a company or sole trader, an alternative version of this template (the Finder's Fee Agreement (Sale of Business)) is available in the Other Asset Sale Documents subfolder. That template can be used where the business owner is looking to sell all of the business and assets to one or more buyers.
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