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Financial Finders Fee Disclosure

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FINANCIAL FINDERS FEE DISCLOSURE

Parties and Engagement

Finder Name:

Client Name:

Effective Date:

Scope of Engagement

The Finder will introduce the Client to prospective sources of capital, financing, purchasers, investors, lenders, or other counterparties (each, a "Prospective Party"). The Finder's services are limited to introductions and facilitation of initial communications unless otherwise agreed in writing.

Finders Fee — Disclosure and Calculation

Finder shall be entitled to the fee set forth below for introductions that result in a transaction or a binding arrangement between Client and a Prospective Party. The parties acknowledge that this disclosure is made prior to any such introduction and that the fee is earned as provided herein.

Flat fee: $

Percentage of transaction value: %

Hourly fee: $ per hour

Contingent fee (payable only upon closing or funding)

Item Value
Transaction Amount $
Applicable Fee Rate %
Calculated Fee Amount $

Payable: At closing or funding Upon introduction that results in a binding agreement Other:

Payment Method:

Late Payment: If any fee is not paid when due, interest will accrue at % per month (or maximum permitted by law), plus reasonable collection costs.

Sources of Compensation & Conflicts

The Finder discloses the following potential sources of compensation related to introductions in addition to the fee disclosed above.

Finder may receive compensation from Prospective Party or third parties. If yes, describe:

Representations, Authorization and Acknowledgment

The Finder represents and warrants that any compensation arrangements disclosed herein are accurate to the best of the Finder's knowledge. The Client represents that Client has full authority to engage the Finder for the described services and to authorize payment of the fee as disclosed.

By signing below, Client acknowledges receipt of this written disclosure of the Finder's fee arrangement, accepts the disclosed fee, and authorizes payment as specified above. Client further acknowledges that Finder is not providing legal, tax, or investment advice unless a separate written agreement exists.

Confidentiality; Use of Information

Each party agrees to keep confidential any non-public information obtained in the course of introductions, except information that is or becomes public through no fault of the recipient, required to be disclosed by law, or necessary to effectuate the introduction or transaction. This confidentiality obligation survives termination of this disclosure for a period of two years.

Termination

Either party may terminate this engagement upon written notice. Termination does not affect Finder's right to fees earned prior to termination or fees that become payable pursuant to the terms of this disclosure for introductions made prior to termination.

Governing Law; Remedies

This Disclosure shall be governed by and construed in accordance with the laws of without regard to conflicts of law principles. The parties' remedies include injunctive relief, specific performance, and recovery of fees and costs where appropriate.

Acknowledgment

Client acknowledges receipt of this Financial Finders Fee Disclosure and confirms that the disclosures above describe the full compensation arrangement between the parties in connection with Finder's introduction services.

Client Acknowledgment:

Finder — Printed Name:

By:

Date:

Client — Printed Name:

By:

Date:

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What the Financial Finders Fee Disclosure Is and When It’s Used

A Financial Finders Fee Disclosure is a written statement provided to parties in a transaction that identifies any fee, commission, or referral payment payable to a finder or introducer for facilitating a financial transaction. The disclosure explains the payer and payee relationship, the amount or method of calculation, timing of payment, and any conditions affecting payment. It is used in corporate transactions, investment placements, syndicated deals, and certain real estate broker introductions to ensure transparency, meet regulatory expectations, and reduce conflicts of interest between parties.

Why Clear Finders Fee Disclosure Matters

Disclosing finder fees reduces legal and regulatory risk, clarifies tax reporting responsibilities, and preserves commercial relationships by making compensation transparent to all parties involved.

Why Clear Finders Fee Disclosure Matters

Who Typically Prepares and Receives These Disclosures

Recipients should include counterparties, compliance officers, accounting departments, and in some cases tax preparers who need to determine reporting obligations.

  • Financial advisors and introducers providing client referrals for investments or private placements.
  • Broker-dealers and real estate brokers who engage third-party finders for transaction introductions.
  • Corporate development and transaction teams documenting third-party referral arrangements.

Core Elements to Include in a Professional Disclosure

A complete disclosure states parties, fee basis, calculation method, payment timing, tax treatment, and any conditions or contingencies that affect entitlement to the fee.

Parties

Identify the paying party, the finder, and the beneficiary exactly as legal entities to avoid ambiguity in enforcement and tax reporting.

Fee Basis

Specify whether the payment is a flat fee, percentage of transaction value, success fee, or retainer plus success fee, including rounding or minimums.

Calculation Method

Describe the exact formula or examples demonstrating how the amount is computed, including reference transaction values or caps.

Payment Timing

State when the fee is due: at closing, upon receipt of proceeds, in staged installments, or upon a defined milestone.

Conditions

List conditions precedent such as closing, receipt of funds, regulatory approvals, or survival periods for claims and clawbacks.

Tax Reporting

Note which party is responsible for 1099 reporting or backup withholding, and whether the payment is gross or subject to withholdings.

Step-by-Step: How to Complete the Disclosure

Follow these sequential steps to prepare, review, and deliver the Financial Finders Fee Disclosure accurately.

  • 01
    Collect Parties: Gather legal names and TINs for payor and finder.
  • 02
    Describe Transaction: Summarize the deal and reference related agreements.
  • 03
    Specify Fee Terms: Enter the amount or calculation and payment conditions.
  • 04
    Review and Sign: Have authorized signatories execute and date the form.

How to Configure the Disclosure Workflow Online

Set up a reusable template and routing so the disclosure can be completed, signed, and retained consistently across transactions.

Field | Configuration Action required | Recommended setting
Upload Document Use a PDF or DOCX source; convert to template.
Add Fields Place name, date, signature, and conditional fields.
Signer Authentication Enable email or SMS code authentication as appropriate.
Routing & Notifications Set signer order and automatic copies to compliance.

Where to Send and How to Submit the Completed Disclosure

After execution, distribute copies and preserve records according to internal and regulatory requirements.

  • Counterparty: Send an executed copy to the other contracting party.
  • Accounting: Provide copy to accounts payable for payment processing.
  • Compliance: Retain a copy for compliance and audit purposes.
  • Tax Preparer: Share with tax reporting team before year-end.

Digital Signing and Technical Delivery Considerations

Ensure the chosen platform preserves an audit trail (timestamps, IPs) and stores signed records in encrypted storage to meet retention and evidentiary needs.

  • Integrations: Salesforce, NetSuite, Google Workspace compatibility.
  • Formats: PDF and DOCX export supported natively.
  • Authentication: Email, SMS code, or stronger methods available.

Key Timing and Reporting Deadlines to Watch

Track internal payment milestones and external tax reporting windows to avoid penalties and ensure correct information flow.

Payment Due Date:

Set according to contract terms or upon closing of the transaction.

Year-End Reporting:

Determine whether fee payments require 1099 reporting by Jan 31.

TIN Collection:

Obtain W-9 from the finder before payment to avoid backup withholding.

Record Retention:

Store executed disclosures per company retention policy and legal requirements.

Audit Requests:

Produce records promptly on regulatory or internal audit timelines.

Common Preparation Errors to Avoid

  • Using informal or partial names that prevent correct tax reporting and lead to mismatched TINs.
  • Failing to describe the triggering event clearly, causing disputes about payment entitlement and timing.
  • Omitting tax responsibility details, which can trigger backup withholding or late information return penalties.
  • Not preserving an immutable signed record and audit trail, complicating enforcement or audit responses.

Consequences of Inaccurate or Missing Disclosures

Tax Penalties: Filing incorrect or late information returns can trigger per-form penalties and interest.
Backup Withholding: Missing or incorrect TINs may require 24% backup withholding on payments.
Contract Disputes: Vague terms increase risk of litigation or arbitration over entitlement.
Regulatory Scrutiny: Lack of disclosure can draw enforcement attention in regulated sectors.
Professional Sanctions: Brokers or advisors may face industry disciplinary actions for nondisclosure.
Recordkeeping Failures: Inadequate retention may impede audits and legal defenses.

eSignature Pricing and Feature Snapshot for Disclosure Workflows

Vendor pricing and feature availability vary; signNow is listed first for comparison. Choose a plan based on volume, authentication, and compliance needs.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Security and Compliance Features to Verify

Encryption: TLS 1.2/1.3; AES-256 at rest
ESIGN / UETA: Compliant with electronic signature acts
HIPAA: Supports HIPAA compliance with a BAA
SOC 2: SOC 2 Type II available
PCI DSS: Cardholder data protection certified
ISO: ISO 27001 information security certified

Download, Save, and Export Options for Executed Disclosures

Ensure the executed document is saved in formats that meet internal archival and audit requirements; export options affect long-term accessibility.

PDF Final Copy

Save a timestamped, flattened PDF that includes the audit trail and signature manifest; this is the standard archival format for legal records.

PDF/A Archive

Export as PDF/A when long-term preservation is required to meet ISO archival standards and ensure future readability.

DOCX Editable

Keep an editable DOCX copy for administrative updates or redactions, but treat the PDF as the signed original.

CSV Metadata Export

Export signer metadata and field-level data as CSV to import into accounting or compliance systems for reporting.

Practical Tips for Accurate and Efficient Disclosures

Adopt consistent templates and controls to reduce errors, simplify review, and speed approvals while protecting compliance and tax reporting accuracy.

Use a Standardized Template
Maintain a single approved disclosure template to ensure consistent language about fee calculation, payment timing, tax responsibilities, and contingencies across transactions.
Collect Tax Information Early
Request W-9 and verify the finder’s TIN before any payment is issued to avoid backup withholding and late reporting penalties.
Limit Ambiguity in Fee Language
Avoid subjective phrases such as 'reasonable fee'; instead state explicit percentages, flat amounts, caps, and examples to reduce contract disputes.
Preserve the Audit Trail
Use an eSignature provider that logs timestamps, IP addresses, authentication methods, and provides a tamper-evident final document for audits.

Industry Examples Illustrating Typical Usage

Real-world examples show how disclosures support compliance and speed transactions while documenting compensation arrangements.

Optica Ventures Example

Optica used a standard disclosure for equity introductions to clarify payment mechanics and reporting

  • 1.5% of deal proceeds paid at closing
  • The disclosure reduced negotiation time and ensured accounting applied correct 1099 treatment.

Martin Properties Example

A property introducer provided a written disclosure before closing to document a finder fee for a commercial lease

  • Flat $5,000 fee payable on lease execution
  • The signed disclosure ensured the fee was processed by accounts payable and preserved for audits.

Frequently Asked Questions and Quick Resolutions

Answers to common questions about completing, signing, and storing Financial Finders Fee Disclosures to help avoid delays or compliance issues.


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