United States. Sell-side M&A advisers, brokers and bankers
Which M&A advisory firms can legally sell your business?
Most sellers choose an adviser on introduction and chemistry, and never check the one thing that is actually checkable: whether the firm is permitted to do the job at all. Many US M&A advisory firms are registered with nobody, and usually that is lawful, under a federal exemption with hard numeric limits and a long list of things the firm must not do. Here are the limits, the list, and the ten minutes of free public searching that most sellers skip.
| Option | ||||||
|---|---|---|---|---|---|---|
| Exempt M&A broker Owner-managed businesses below the statutory thresholds selling to a buyer who will actually run the place | A firm relying on the M&A broker exemption at 15 U.S.C. 78o(b)(13), which lets it broker the transfer of ownership of a privately held company without registering as a broker-dealer. Most US lower middle market M&A advisory firms operate here. | An eligible privately held company only: one with no securities registered with the SEC that, in its prior fiscal year, had EBITDA of less than $25,000,000 OR gross revenues of less than $250,000,000. Either test satisfies it, not both. Those figures adjust for inflation every five years from 29 December 2027, on an Employment Cost Index formula rounded to the nearest $100,000. | None, provided every condition of the exemption holds. The broker must also reasonably believe the acquirer will control and actively manage the company after the deal. | There is no register of exempt M&A brokers, which is the practical problem: you cannot look one up. What you can do is check it is not a barred former registrant, using FINRA BrokerCheck, and read the engagement letter against the statutory conditions. | A long list, and each item voids the exemption. It may not receive, hold, transmit or have custody of funds or securities in the transaction. It may not provide financing, or assist in obtaining third-party financing without proper compliance and disclosure. It may not represent both buyer and seller without clear written disclosure and consent. It may not work on public offerings of registered securities, deal with shell companies outside a business combination, form a buyer group with its own assistance, engage with passive buyers, or bind the parties to the transaction. | If a condition is breached the exemption falls away and the firm has been acting as an unregistered broker. That is a problem for the firm, and it can become one for your deal: an unregistered broker's commission agreement can be challenged, which is a live risk at exactly the moment you least want one. |
| Registered broker-dealer Deals above the exemption thresholds, or any process involving a capital raise | A firm registered with the SEC and, in practice, a FINRA member. Investment banks running sell-side processes sit here, as do M&A advisory firms that chose to register rather than rely on the exemption. | Any. Registration carries no size ceiling, which is why deals above $25,000,000 EBITDA or $250,000,000 revenue need one and why a firm handling both large and small deals will usually be registered. | Yes, with the SEC, and FINRA membership in practice. Its registered representatives are individually licensed. | FINRA BrokerCheck, and it is free and immediate. Search the firm and the individual: it returns registration status, employment history, exams passed and any disclosure events including customer complaints and regulatory actions. This is the single most useful ten minutes in choosing an adviser. | Fewer transactional limits, more conduct rules. FINRA Rule 2010 requires members to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business, which is a general standard a regulator can enforce against conduct that breaches no specific rule. | Lower on the registration question, because it is verifiable in a public database before you sign. Your remaining risk is ordinary: fee structure, incentives and whether the firm has run deals like yours. |
| Registered investment adviser Owners whose adviser is also managing the proceeds, where the conflict needs naming | A firm registered as an investment adviser rather than as a broker. Wealth managers and some corporate finance boutiques appear here, and the distinction matters because advising on securities and effecting transactions in them are different regulated activities. | Not defined by deal size. An adviser registration does not by itself permit brokering a company sale, which is the confusion worth clearing up early. | Yes, with the SEC or a state, depending on assets under management. | SEC Investment Adviser Public Disclosure at adviserinfo.sec.gov, which returns the firm's Form ADV including its services, fee schedule, conflicts of interest and disciplinary history. Form ADV Part 2 is written in plain English by requirement, and it is the most candid document most firms publish about how they are paid. | Being registered as an adviser does not make a firm a broker. If it is also brokering the sale it needs either broker registration or the M&A broker exemption, and you should ask which it is relying on. | The conflict is the risk rather than the registration. An adviser who will manage the sale proceeds has an interest in the deal closing and in the form the consideration takes. That is not disqualifying, and it should be disclosed in writing. |
| Unregistered business broker Very small main street sales, with the caveat below | A firm brokering business sales that is neither registered nor squarely inside the M&A broker exemption, usually because the transaction is structured as an asset sale rather than a transfer of securities. | In practice, small owner-operated businesses. The distinction that decides its position is not size but structure: an asset sale involves no securities, so the securities laws that create the registration question do not engage in the same way. | None claimed. That is defensible for a pure asset sale and becomes a problem the moment the deal is structured as a share sale, which is common and is often decided late for tax reasons. | Ask directly, in writing, which of the three positions the firm is in: registered, relying on the M&A broker exemption, or handling asset sales only. A firm that cannot answer that question crisply is telling you something. | Everything the exemption forbids, plus the structural limit above. The risk concentrates in the gap between how the deal starts and how it ends. | Highest of the four, and it is asymmetric: the exposure arrives at closing, when the structure is settled and the commission falls due. Ask at engagement what happens to the fee agreement if the deal becomes a share sale. |
How we chose these, and how they are ordered
Four regulatory positions a US sell-side adviser can occupy, rather than four named firms. Firms are compared on fees elsewhere; this page compares the thing a seller can verify before signing, which is what a firm is permitted to do.
Every statement is sourced to primary material: the statutory exemption at 15 U.S.C. 78o(b)(13), the two public regulator databases, and FINRA's own rulebook. Nothing here is taken from a firm's marketing or from a review site, because a firm's own account of its regulatory position is the thing you are trying to check.
Order runs by how common the position is among lower middle market advisers, which is also roughly the order a seller will meet them in. It is not a ranking of quality: a well run exempt M&A broker is a better adviser than a poorly run registered one, and registration is a floor rather than a recommendation.
This page is not legal advice and does not substitute for counsel on your own transaction. Its purpose is to tell you which questions have checkable answers, and where to check them.
- Exempt M&A broker 15 U.S.C. 78o(b)(13), the M&A broker exemption (Cornell LII)
- Registered broker-dealer Investor.gov, broker-dealer
- Registered investment adviser SEC Investment Adviser Public Disclosure
- Unregistered business broker 15 U.S.C. 78o(b)(13), the M&A broker exemption (Cornell LII)
Which M&A Advisor is an independent site operated by Ellul Solutions Ltd. It is not affiliated with, endorsed by or connected to any advisory firm, broker-dealer or regulator named here, and it is not a law firm. Nothing on it is legal advice or advice on any transaction, and the statutory summaries here are a starting point for a conversation with your own counsel, not a substitute for one. We take no commission from any firm in this comparison and carry no paid placements. Statutory thresholds carry their own inflation adjustment from 29 December 2027, and every statement carries the date we read the primary source.
Who may lawfully broker a US private company sale, and how to verify it, 2026
Last updated
A seller can check an adviser's regulatory position before signing, and almost nobody does, largely because the answer differs by position and only two of the four appear in any database. This table sets out all four on one page with the verification route for each.
Every row is taken from primary sources read on 15 August 2026 and cited in full below: the statutory text of 15 U.S.C. 78o(b)(13) for the exemption, its thresholds and its disqualifying activities; FINRA BrokerCheck and SEC Investment Adviser Public Disclosure for the verification routes; FINRA Rule 2010 for the conduct standard applying to members; and Investor.gov for the definition of a broker-dealer. Dollar thresholds are quoted as enacted and are subject to the statute's own five-yearly inflation adjustment beginning 29 December 2027, which is stated rather than applied. Nothing here is derived or estimated, and no figure describes what any firm charges. This is a statement of what the law and the public registers say, not advice on a transaction.
| Position | Registration required | Deal size it may handle | How you verify it | The limit that catches firms out |
|---|---|---|---|---|
| Exempt M&A broker | No, exempt under 78o(b)(13) | EBITDA under $25m OR revenue under $250m | No public register exists | Custody, financing, binding the parties, passive buyers |
| Registered broker-dealer | Yes, SEC and FINRA | No size ceiling | FINRA BrokerCheck, free | Conduct rules including FINRA Rule 2010 |
| Registered investment adviser | Yes, SEC or state | Not size-defined | SEC IAPD, Form ADV | Adviser registration alone does not permit brokering |
| Unregistered business broker | None claimed | Small, in practice | Ask in writing; nothing to search | Structure: a share sale changes its position |
| Any of the above, dual role | Depends | Depends | Both BrokerCheck and IAPD | Representing both sides needs written consent |
- A US M&A broker may act without registering where the company has EBITDA under $25,000,000 or gross revenues under $250,000,000 in its prior fiscal year.
- The two thresholds are joined by OR: satisfying either one qualifies the company, so a $300,000,000 revenue business with $20,000,000 of EBITDA is still eligible.
- There is no public register of exempt M&A brokers, so the majority of lower middle market advisers cannot be looked up at all.
- An exempt M&A broker may not receive, hold, transmit or have custody of the funds or securities in the transaction, the condition most often breached through escrow arrangements.
- The statutory thresholds adjust for inflation every five years beginning 29 December 2027, on an Employment Cost Index formula rounded to the nearest $100,000.
Cite this page
“Who may lawfully broker a US private company sale, and how to verify it, 2026”, Which M&A Advisor, https://whichmadvisor.com/ (updated 2026-08-15). Every row is taken from primary sources read on 15 August 2026 and cited in full below: the statutory text of 15 U.S.C. 78o(b)(13) for the exemption, its thresholds and its disqualifying activities; FINRA BrokerCheck and SEC Investment Adviser Public Disclosure for the verification routes; FINRA Rule 2010 for the conduct standard applying to members; and Investor.gov for the definition of a broker-dealer. Dollar thresholds are quoted as enacted and are subject to the statute's own five-yearly inflation adjustment beginning 29 December 2027, which is stated rather than applied. Nothing here is derived or estimated, and no figure describes what any firm charges. This is a statement of what the law and the public registers say, not advice on a transaction.
Want introductions to advisers that fit your deal?
Tell us roughly what size the business is and how you would like it sold. Advisers whose regulatory position and bracket actually fit that will contact you directly.
Related guides
Sourced, dated, kept current.
- The M&A broker exemption: $25m EBITDA or $250m revenue
Most US M&A advisory firms are unregistered and lawfully so, under a statutory exemption with hard thresholds and a long list of disqualifiers. What they are.
- How to check an M&A advisory firm before you sign
Two free public databases, one written question and the four things to read in an engagement letter. Ten minutes that most sellers never spend.
- Conflicts to name before you appoint an M&A advisory firm
Dual representation, buyer financing, proceeds management and buyer-group formation are all restricted or disclosable. What to surface at engagement, not at closing.
Straight answers
Do M&A advisory firms have to be registered?
Often not. A federal exemption at 15 U.S.C. 78o(b)(13) lets an M&A broker handle the transfer of ownership of an eligible privately held company without registering as a broker-dealer, and most US lower middle market advisory firms operate under it. The exemption is conditional rather than general: it applies only where the broker reasonably believes the acquirer will control and actively manage the company afterwards, and a list of disqualifying activities applies throughout.
What size company does the M&A broker exemption cover?
An eligible privately held company is one with no securities registered with the SEC that, in its prior fiscal year, had EBITDA of less than $25,000,000 OR gross revenues of less than $250,000,000. The word between the two is OR, which is the most commonly misread part of the provision: a company with $300,000,000 of revenue but $20,000,000 of EBITDA still qualifies. Both figures adjust for inflation every five years from 29 December 2027.
How do I check whether an M&A advisory firm is legitimate?
Use two free public databases and one written question. FINRA BrokerCheck returns registration status, employment history and disclosure events for any registered firm or individual. SEC IAPD at adviserinfo.sec.gov returns Form ADV for registered investment advisers, whose Part 2 sets out fees and conflicts in required plain English. Most lower middle market advisers appear in neither, lawfully, so ask in writing whether the firm is registered, relying on the M&A broker exemption, or handling asset sales only.
Can my M&A adviser hold the deal funds?
Not if it is relying on the M&A broker exemption. The statute disqualifies a broker that receives, holds, transmits or has custody of the funds or securities in the transaction. This is the condition most easily breached by accident, usually through an escrow arrangement set up with good intentions. Check the engagement letter for it specifically, because a breach means the firm has been acting as an unregistered broker.
Can one firm advise both the buyer and the seller?
Under the exemption, only with clear written disclosure and consent. Legally that is a low bar and practically it deserves more attention than it usually gets. Ask how many of the firm's last ten deals were buy-side. The answer disqualifies nobody; it tells you where the firm's relationships and its future revenue sit, which is worth knowing before you hand over your confidential information.
What happens if my adviser turns out to be an unregistered broker?
The immediate exposure is the firm's, but it reaches your transaction. An unregistered broker's commission agreement is open to challenge, and the challenge tends to arrive at closing when everyone is committed and nobody wants a dispute. That is why the checkable questions are worth asking at engagement, when they cost nothing, rather than at completion when they cost the success fee.
Is a wealth manager allowed to sell my business?
Not by virtue of being a registered investment adviser. Advising on securities and effecting transactions in them are different regulated activities, so a firm registered as an adviser still needs either broker registration or the M&A broker exemption to broker the sale. Ask which it is relying on. Where the same firm will also manage the proceeds, there are two conflicts to name: that the deal must close, and that cash consideration is easier to manage than an earn-out.
Check the position before you check the pitch
The four regulatory positions a US sell-side adviser can occupy, the statutory thresholds that decide them, and the two free databases that settle it in ten minutes.