Referral networks • Companion guide
Can a Business Broker Pay a Referral Fee? Rules, Commission Splits and Co-Brokerage Agreements
Paying for introductions can strengthen a referral network or put your license at risk. Here's who business brokers can and can't pay, how co-brokers typically share fees, and what to put in writing before a single document changes hands.
Quick answer
Business brokers can usually share fees with other licensed brokers under a written agreement, but paying others is restricted. CPAs who accept a referral fee must disclose it to the client in writing and can't take commissions tied to clients they audit or review. Attorneys generally can't accept anything of value for a recommendation, though disclosed, non-exclusive reciprocal referrals are often allowed. In states that require a real estate license for business brokerage, paying an unlicensed person for a referral is often prohibited, and finder's fees on stock sales raise securities issues. Put every fee arrangement in writing before the introduction, and check with your counsel.
Part of our referral networks series
[Part 1](p1): building your referral network. [Part 2](p2): turning relationships into listings. This guide: the rules for paying partners and sharing fees with other brokers.
This guide is general information, not legal advice. Rules vary by state, country and profession, and change over time. Always confirm with your own counsel and your partner's professional rules before offering or accepting a fee.
Picture a broker who has just closed a $1.8 million sale. Three weeks later, an accountant who introduced the seller calls to ask about “her share.” The same week, a broker from the next state, who sent the buyer, says he expected half the fee. Neither arrangement was ever written down.
Nobody acted in bad faith. But one of those payments may not be allowed at all, and the other is now an argument instead of an agreement. Referral fees are one of the most misunderstood parts of building a referral network, and getting them wrong can cost you more than money.
In Part 1 we focused on rewarding partners through reciprocity and service. This guide covers what happens when money enters the picture.
Why referral fees are tricky in business brokerage
Three sets of rules overlap whenever a business broker pays for, or receives payment for, a referral:
- Your partner's professional rules. Accountants, attorneys and financial advisors each have their own codes of conduct on accepting payment for recommendations.
- Broker licensing. In many states, selling a business requires a real estate license, and real estate law restricts paying anyone who isn't licensed.
- Securities law. When a deal is structured as a sale of stock, transaction-based payments to unregistered people can raise securities issues.
A fee that's perfectly fine in one deal can be prohibited in the next, depending on who receives it, where the business is located, and how the deal is structured.
Who you can pay, and who you can't
| Referral partner | Can you pay a fee? | Key conditions |
|---|---|---|
| Another licensed business broker | Usually yes | Put the split in a written co-brokerage or referral agreement before the introduction, and confirm both brokers are licensed where required. |
| Accountant or CPA | Sometimes | The CPA must disclose the fee to the client in writing, can't accept commissions tied to clients whose statements they audit or review, and state boards may be stricter. |
| Attorney | Generally no | Lawyers can't accept anything of value for a recommendation. Non-exclusive, disclosed reciprocal referrals and token thank-you gifts are often allowed. |
| Financial advisor | Use caution | Advisors owe duties to their clients, and undisclosed referral payments can conflict with them. Check their firm's and regulator's rules. |
| Unlicensed person, such as a friend or past client | Often no | In states that require a real estate license for business brokerage, paying unlicensed people for referrals is often prohibited beyond small gifts. |
| A colleague in your own firm | Yes, under firm policy | Internal splits are set by your firm's commission policy, ideally written down in advance. |
Accountants and CPAs
Under the AICPA Code of Professional Conduct rule on commissions and referral fees, a CPA who accepts a referral fee for recommending a service must disclose it to the client in writing. A CPA may not accept a commission connected to a client whose financial statements the firm audits or reviews, and the restriction extends to certain compilation work. State boards of accountancy can be stricter than the AICPA. In practice, many CPAs prefer not to accept fees at all, and value reciprocal referrals and good service instead.
Attorneys
The ABA Model Rules generally bar lawyers from giving anything of value for recommending their services, and from sharing legal fees with non-lawyers. As the American Bar Association explains, reciprocal referral arrangements with non-lawyers are allowed under Rule 7.2(b)(4) if the lawyer keeps independent judgment, tells the client about the arrangement, the arrangement isn't exclusive, and it isn't indefinite. Small thank-you gifts that are not payment for the referral are also allowed. State bar rules vary, so check yours.
Unlicensed people and real estate license states
In many states, business brokerage falls under real estate licensing, usually because the sale includes a lease or other interest in real property. As of late 2025, states that require a real estate license to sell a business include Alaska, Arizona, California, Colorado, Florida, Georgia, Idaho, Minnesota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wisconsin and Wyoming, while Illinois requires registration with the state securities department. Real estate law in these states typically restricts paying anyone without a license. Texas, for example, bars license holders from paying unlicensed people for referrals beyond small gifts of merchandise.
Licensing rules change, and they differ in how they treat leases and real estate. Check your state's current requirements with your state real estate commission before paying a friend, a past client or anyone else without a license.
Stock sales and securities law
When a business is sold as a sale of stock or membership interests rather than assets, securities law can come into play. Paying a transaction-based finder's fee, meaning one that depends on the deal closing or is a percentage of the price, to someone who isn't registered can create risks, including regulatory action and agreements that can't be enforced. (Overview of finder's fee risks.)
For brokers themselves, a federal M&A broker exemption, effective March 29, 2023, exempts brokers from SEC registration when facilitating the sale of an eligible privately held company with less than $25 million in EBITDA or less than $250 million in revenue, provided the buyer will control and actively manage the business. The exemption doesn't cover state securities laws, and it doesn't make it safe to pay unregistered third parties. Talk to securities counsel before paying anyone a fee on a stock deal.
What to put in a co-brokerage or referral fee agreement
Most fee disputes come from agreements that were never written down, or were written after the introduction. Sign before any confidential information is shared, and cover at least these points:
- The parties, and their license numbers where licensing is required.
- What the agreement covers: a specific listing, a specific buyer, or all deals between you.
- What counts as an introduction, and how a buyer is registered to the referring party.
- The fee: the percentage or flat amount, what it's calculated on, and whether it's a share of your fee or paid separately.
- When it's paid, usually at closing, and from whose proceeds.
- A protection period, for example 12 or 24 months, during which the fee applies if the introduced party buys or sells.
- Confidentiality and non-circumvention: the co-broker and their buyer keep information confidential and don't go around you to the seller.
- Communication: who speaks to the seller and the buyer, and how updates are shared.
- Disclosure: any disclosures required by the partner's professional rules or your state.
- Dispute resolution and governing law.
- Signatures from both parties, before the introduction.
How Vertica CRM keeps fee agreements simple and enforceable
A written agreement only helps if it's signed on time and easy to find later. Vertica CRM is built to make that automatic:
- Co-brokerage agreements instead of NDAs. When someone inquires about one of your listings and selects “I am a broker,” Vertica CRM can send a co-brokerage agreement instead of the standard buyer NDA, so the agreement is signed before any confidential information is released. (NDA and buyer registration options.)
- One-click agreements from the contact record. Send a referral or fee-split agreement as a Vertica Sign template for e-signature in one click, and the signed copy is saved to that contact's record. (See also our DocuSign alternative for brokers.)
- A dated record of every introduction. Vertica CRM records who released confidential information to each buyer, and when, so if a fee is questioned months later, the facts are on the record. (How release tracking works.)
- Access only after signing. Buyer approval rules decide when a buyer, or a co-broker's buyer, can see the CIM and financials in the data room. (Buyer approval and data rooms.)
- Partners and fees on one record. The Relationships tab links each partner to the clients they referred, and the referral report shows introductions, listings and fees by partner.
- Nothing forgotten at closing. A workflow can create a task to pay the referral fee, or confirm it's on the settlement statement, when a deal reaches the closing stage.
Rewarding partners without paying fees
For many partners, especially accountants and attorneys, a fee isn't allowed or isn't wanted. The rewards that matter most to them are usually the ones that make them look good to their clients:
- Refer business back. Send your buyers and sellers to them for tax, legal and financial advice. (Give before you ask.)
- Close the loop. Tell them what their introduction led to, every time. (What to do when a referral arrives.)
- Teach. Offer a short session for their staff on how business sales work.
- Say thank you, within the gift limits of their profession and your state.
- Remember the days that matter. In Vertica CRM, workflows can remind you, or send an email or text, on a partner's birthday or the anniversary of a closing.
A checklist before you offer or accept a referral fee
- Who is receiving the fee, and what are their professional rules?
- Does your state, or the state where the business is located, require a real estate or other license?
- Is the deal a sale of assets or of stock? If stock, have you talked to securities counsel?
- Does the client need to be told about the fee, and has that disclosure been made in writing?
- Is the agreement written, signed by both parties, and dated before the introduction?
- Does it include a protection period, confidentiality and non-circumvention terms?
- Is the agreement saved where your whole team can find it?
See co-brokerage agreements handled automatically
I'll show you how Vertica CRM sends co-brokerage agreements to brokers automatically, records every introduction, and reminds you to pay referral fees at closing.
Schedule a Demo Questions? Call our office at +1 212 381 4994.Frequently asked questions about referral fees and co-brokerage
Can a business broker pay a referral fee?
Often, but it depends on who receives it. Fee splits with other licensed brokers are common when agreed in writing. CPAs must disclose referral fees to clients in writing and can't accept them for audit or review clients, attorneys generally can't accept anything of value for a recommendation, and in states that require a real estate license for business brokerage, paying unlicensed people for referrals is often prohibited. Check with your counsel first.
How much is a typical referral fee between business brokers?
In Joshua Factor's experience, about 20% to 30% of the fee is a good approximate range for a referral where the referring broker doesn't work the deal, but it depends on the relationship. Being generous with referral partners tends to pay off, because partners actively keep generous brokers in mind for future referrals.
Can a business broker pay a referral fee to an unlicensed person?
In many states, no. Where business brokerage requires a real estate license, real estate law typically prohibits paying unlicensed people for referrals beyond small gifts. Texas, for example, bars license holders from paying unlicensed people valuable consideration for referrals. Check your state's rules before paying a friend or past client.
Can a CPA accept a referral fee from a business broker?
Under the AICPA Code of Professional Conduct, a CPA who accepts a referral fee must disclose it to the client in writing, and may not accept a commission connected to a client whose financial statements the firm audits or reviews. State boards of accountancy may impose stricter rules.
Can an attorney accept a referral fee from a business broker?
Generally no. The ABA Model Rules bar lawyers from giving or receiving anything of value for recommendations and from sharing legal fees with non-lawyers. Non-exclusive reciprocal referral arrangements that are disclosed to the client, and token thank-you gifts, are often allowed. State bar rules vary.
How do business brokers split commissions on a co-brokered deal?
There is no single standard. Common structures include an equal split between the listing broker and the buyer's broker, a referral percentage of roughly 20% to 30% for an introduction only, depending on the relationship, a flat fee, or a negotiated split based on who does the work. The split should be agreed in a written co-brokerage agreement before the introduction.
What should a co-brokerage agreement include?
A co-brokerage agreement should identify the parties and their licenses, what deals it covers, what counts as an introduction, the fee and how it's calculated, when it's paid, a protection period, confidentiality and non-circumvention terms, communication responsibilities, any required disclosures, dispute resolution, and both parties' signatures before the introduction.
Are finder's fees allowed on stock sales of a business?
Use caution. When a business is sold as a sale of stock or membership interests, paying a transaction-based finder's fee to an unregistered person can raise securities law issues, including regulatory risk and unenforceable agreements. The federal M&A broker exemption covers brokers in qualifying deals but not unregistered third parties, and doesn't override state law. Consult securities counsel.
How does Vertica CRM help with co-brokerage agreements?
When an inquirer selects “I am a broker,” Vertica CRM can send a co-brokerage agreement instead of a buyer NDA. Brokers can also send fee-split or referral agreements as Vertica Sign templates in one click from a contact record, with the signed copy saved to the record, and Vertica CRM records who released information to each buyer and when.