Rules that apply to a sale in San Jose
| Topic | What the rule says | Source |
|---|---|---|
| Who may broker the sale (California law) | California treats the sale of a business and its goodwill as a "business opportunity" (B&P Code 10030), and brokering business opportunities for compensation requires a California real estate license (B&P 10131). | California B&P Code 10030 - Business opportunity, California B&P Code 10131 - Real estate broker |
| State income tax on the gain | California's top rate is 13.3% on income over $1 million, which includes the 1% surcharge; capital gains are taxed as ordinary income (Tax Foundation). | Tax Foundation - 2026 State Individual Income Tax Rates and Brackets |
What brokers in San Jose charge
Main Street business brokers usually charge a success fee - a percentage of the sale price paid at closing - with a minimum fee; lower-middle-market M&A advisers often use tiered percentages and may charge an upfront retainer credited against the success fee. Few brokers publish their rates. Two that do: Empire Flippers (online businesses) charges 15% of the price up to $700,000, then 8% up to $5M and 2.5% above; Flippa charges a 10% success fee plus a listing fee. Use published schedules as a benchmark when you negotiate, and compare total cost if the deal does not close. See broker vs DIY for the fee math and our broker reviews.
How to vet a broker in San Jose
- Check the license
Ask for their California real estate license number and look it up with the state real estate regulator before you sign.
- Ask for closed deals like yours
How many businesses in your industry and size range did they close in the last two years, and at what share of asking price?
- Get every fee in writing
Success-fee percentage, minimum fee, any upfront, valuation or marketing fee, and whether buyers you bring trigger the fee.
- Limit exclusivity and the tail
Listing term (6-12 months is common) and the tail period after it ends during which a sale still owes a fee.
- Know who does the work
The person who pitches you should be the person who runs your deal.
- Know your number first
Run the valuation calculator so you can judge whether a broker’s suggested price is a listing tactic.
Selling a specific kind of business
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Frequently asked questions
Do business brokers in San Jose need a license?
California treats the sale of a business and its goodwill as a “business opportunity” (B&P Code 10030), and brokering business opportunities for compensation requires a California real estate license (B&P 10131).
Sources
- California B&P Code 10030 - Business opportunity (accessed 2026-09-23)
- California B&P Code 10131 - Real estate broker (accessed 2026-09-23)
- Tax Foundation - 2026 State Individual Income Tax Rates and Brackets (accessed 2026-09-23)
- Empire Flippers - Sell your online business (fees and requirements) (accessed 2026-09-23)
- Flippa - Pricing (accessed 2026-09-23)