What is a Person Called Who Sells Private Business Shares and Earns Commission?

Question from Badclashhhh, What is a Person Called Who Sells Private Business Shares and Earns Commission?

Answer from AI:

In the United States, a person who sells private business shares and earns a commission is typically referred to as a **broker** or **broker-dealer**. These individuals or entities are involved in the buying and selling of securities, including private business shares, and they earn a commission for their services.

Understanding the Role of a Broker-Dealer

A broker-dealer is a person or firm in the business of buying and selling securities on behalf of its customers (as a broker) or for its own account (as a dealer). Here are some key points to understand about broker-dealers:

• Registration: Broker-dealers must be registered with the Securities and Exchange Commission (SEC) and are typically members of the Financial Industry Regulatory Authority (FINRA).
• Regulation: They are subject to various regulations to ensure fair practices and protect investors. These regulations include the Securities Exchange Act of 1934 and rules set by FINRA.
• Licensing: Individuals working for broker-dealers must pass certain exams, such as the Series 7 and Series 63, to be licensed to sell securities.

Legal Requirements and Compliance

Broker-dealers must adhere to strict legal and regulatory requirements, including:

1. Registration with the SEC: As per the Securities Exchange Act of 1934, broker-dealers must register with the SEC.
2. FINRA Membership: Most broker-dealers are required to be members of FINRA, which oversees brokerage firms and their registered representatives.
3. State Registration: Broker-dealers may also need to register with state securities regulators, depending on where they operate.
4. Compliance with Anti-Fraud Provisions: Broker-dealers must comply with anti-fraud provisions to prevent deceptive practices.

When to Consult a Legal Professional

If you are considering becoming a broker-dealer or engaging in activities that involve selling private business shares for a commission, it is crucial to consult with a legal professional. A lawyer specializing in securities law can provide personalized advice and ensure compliance with all relevant regulations.

Resources for Further Information

For more detailed information, you can refer to the following resources:

• SEC: Broker-Dealer Registration
• FINRA: Broker-Dealers

Understanding the role and responsibilities of a broker-dealer is essential for anyone involved in the sale of private business shares. Always seek professional legal advice to navigate the complexities of securities regulations.