How to Register as a Business Broker with the Texas State Securities Board

How to Register as a Business Broker with the Texas State Securities Board

If you want to operate as a business broker in Texas, it is crucial to understand the registration requirements set by the Texas State Securities Board (TSSB). Business brokers facilitate the sale or purchase of businesses, often involving securities transactions, making regulatory compliance essential.

Understanding Business Broker Registration in Texas

The Texas Securities Act requires individuals or firms engaged in securities transactions to register with the Texas State Securities Board unless an exemption applies. Business brokers involved in transactions that include stock, membership interests, or other securities must ensure compliance with the state’s regulations.

Registration Requirements

To register as a business broker with the TSSB, follow these key steps:

1. Determine if Registration is Required

• If the transaction solely involves the sale of a business’s assets (without stock or securities), registration may not be necessary.

• If securities are part of the deal, business brokers must register as dealers or agents under the Texas Securities Act.

2. Complete the Application Process

• File a paper version of the Form BD (Broker-Dealer Registration).

• Individuals associated with the brokerage must file paper Form U4 (Uniform Application for Securities Industry Registration or Transfer).

3. Pay Applicable Fees

• The registration process includes fees for filing and processing.

• Fees vary depending on the firm size and the number of registered agents.

4. Maintain Compliance and Renew Registration

• Business brokers must comply with ongoing reporting and renewal requirements.

• Renew registration annually through the Texas State Securities Board and FINRA.

Final Thoughts

Registering as a business broker with the Texas State Securities Board ensures compliance and legitimacy in securities-related business transactions. Understanding the requirements and exemptions will help brokers navigate the regulatory landscape efficiently.

If you are considering registration, consult RIA Compliance Concepts for assistance through the business broker-dealer application process and to ensure full compliance with Texas regulations.