Practice Test Geeks(CBB) Certified Business Brokers Practice Test
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CBB Negotiation Strategies & Deal Closing Flashcards

6 cards from real CBB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CBB Negotiation Strategies & Deal Closing flashcards as text

  1. What is a 'non-compete agreement' in a business sale and why is it important?

    Answer: A clause preventing the seller from starting or joining a competing business for a defined period and geography

    Non-compete agreements protect the buyer's investment by preventing the seller from immediately recreating the business and poaching customers.

  2. What is a 'closing checklist' in a business sale and who typically maintains it?

    Answer: A comprehensive list of all documents and conditions required to complete the transaction; typically maintained by the broker or attorney

    A closing checklist ensures all legal, financial, and operational requirements are completed before funds are released and ownership transferred.

  3. What happens at 'closing' in a business sale transaction?

    Answer: Ownership legally transfers, funds are released, and all closing documents are signed

    Closing is the final step where all transaction documents are executed, funds are disbursed, and legal ownership passes from seller to buyer.

  4. How does a broker handle a 'renegotiation' request from a buyer after due diligence reveals issues?

    Answer: Evaluate the materiality of the issues and facilitate good-faith discussions to adjust terms appropriately

    If due diligence uncovers genuine material issues, a skilled broker facilitates renegotiation to save the deal while fairly reflecting discovered risks.

  5. What is an 'allocation of purchase price' and why does it matter at closing?

    Answer: The assignment of the total purchase price across different asset classes for tax purposes

    Purchase price allocation determines how much of the price is assigned to assets like equipment, goodwill, and non-competes, affecting tax treatment for both parties.

  6. What is the purpose of a 'training and consultation agreement' often included in a business sale?

    Answer: To formalize the seller's obligation to train the buyer and provide post-closing support for a defined period

    This agreement defines the scope, duration, and compensation (if any) for the seller's support of the new owner during the transition period.

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