What Is A Finder Agreement

A research fee may also be included in financial statements in which a company purchases selected assets or materials from another company. For example, a car rental company may need more limousines to expand its fleet; a research fee may be paid to the person who arranges the purchase of used limousines from a competitor or company that no longer needs these vehicles. If a discoverer is not authorized as a broker-dealer under U.S. and government securities laws, a research contract could be illegal and unenforceable. In addition, a company that does not properly use a finder could be held responsible for aiding and assisting in the event of a breach of securities laws. Finder fees can be used to reward business contacts that refer new customers to a business or make new sales. For example, if a contact arranges a meeting between the buyer and the seller of a business, he may receive a research fee for the organization of the agreement. This can also apply to companies that seek and win investors through recommendations from other investors. Many securities laws, both nationally and federally, give investors the right to recoup their investments if a person who sold the investments has materially misled investors or omitted information that makes the information provided materially misleading.

An investor could argue that both the finder and the issuer misled the investor by not informing the investor of the protective measures that the granting of brokerage-dealer licences is supposed to offer and by not omitting the fact that the finder is not authorized. Unfortunately, the use of the wrong type of finder or the wrong type of search agreement can lead to a disaster. If a film production company was in the market to buy more cameras, lights and other devices, there could be a search fee for the person or company that linked the business to a seller. Research fees may also be available to insure independent professionals or contractors for a project. The problem is that some discoverers – especially „professionals“ – could violate federal and regional title laws. It is forbidden to pay a Finder a tax based on the amount of capital that the Finder brings to the company.

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