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PEMS Co. International, Inc. agreed to find a buyer for Rupp Industries, Inc., for a...

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Accounting

PEMS Co. International, Inc. agreed to find a buyer for Rupp Industries, Inc., for a commission of 2 percent of the purchase price, which was to be paid by the buyer. Using PEMSs services, an investment group bought Rupp for $20 million and changed its name to Temp-Air, Inc. PEMS asked Temp-Air to pay a commission on the sale but Temp-Air refused, arguing that PEMS had acted as a broker in the deal without a license. The applicable statute defines a broker as any person who deals with the sale of a business. If this statute was intended to protect the public, can PEMS collect its commission? Explain. [PEMS Co. International, Inc. vs. Temp-Air, Inc., _N.W.2d(Minn.App. 2011)]

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The Statute defines a broker as any person who deals with the sale of a business, it does not essentiate a license to be termed as a broker. Therefore, the argument of Temp-Air that PEMS had acted as a broker in the deal without a license cannot stand as a base for not paying them the Commission. PEMS can collect its commission from Temp-Air.

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