Selling through a broker in California: at a glance
California rules that affect a business sale
| Topic | What the rule says | Source |
|---|---|---|
| Who may broker the sale | 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 |
| Bulk sale / successor liability | If a seller owes sales and use tax, the buyer must withhold enough of the purchase price until the seller produces a CDTFA receipt or a certificate that no tax is due; a buyer who fails to withhold becomes personally liable up to the purchase price (Revenue and Taxation Code 6811-6812). CDTFA has 60 days after a request to issue the certificate or state the amount due. | CDTFA - Revenue and Taxation Code 6811, CDTFA - Revenue and Taxation Code 6812 |
| Non-compete in a sale | California voids most non-competes, but B&P Code 16601 lets a seller of a business's goodwill, or an owner selling all of their ownership interest, agree not to compete within the area where the business operated, as long as the buyer carries on a like business there. | |
| Trade-specific note | Contractors: the CSLB says a contractor license is not transferable to a new owner or entity; the buyer applies for its own license and posts new bonds. |
What business brokers 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 business broker in California
- 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.
City guides in California
Selling a specific kind of business
Brokers and marketplaces you will run into
See what you would keep after California tax
Asset vs stock structure, price allocation and state tax.
Want help finding a vetted business broker in California?
Tell us about your business and what you need. We are building a list of vetted brokers and M&A advisers in California and will follow up personally with next steps. No obligation.
Frequently asked questions
Do business brokers need a license in California?
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).
How much tax will I pay on the sale of my business in California?
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). Federal tax applies on top; model both with the after-tax proceeds calculator.
How much do business brokers charge?
Most charge a success fee as a percentage of the price with a minimum fee; few publish rates. Published examples: Empire Flippers 15% up to $700,000 (tiered down above that) and Flippa 10% plus a listing fee.
Can I sell my business without a broker in California?
Yes. Owners can sell their own business; licensing rules apply to people who broker a sale for others. You will still want a transaction attorney and CPA. See broker vs DIY.
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)
- CDTFA - Revenue and Taxation Code 6811 (accessed 2026-09-23)
- CDTFA - Revenue and Taxation Code 6812 (accessed 2026-09-23)
- California B&P Code 16601 (FindLaw) (accessed 2026-09-23)
- California CSLB - Change in business entity (accessed 2026-09-23)
- Empire Flippers - Sell your online business (fees and requirements) (accessed 2026-09-23)
- Flippa - Pricing (accessed 2026-09-23)