BROKERAGE COMPANY

A business whose main responsibility is to be an intermediary that puts buyers and sellers together in order to facilitate a transaction. Brokerage companies are compensated via commission after the transaction has been successfully completed.

For example, when a trade order for a stock is carried out, an individual often pays a transaction fee for the brokerage company's efforts to execute the trade.

The real estate industry also operates in a brokerage-company format, as it is common for real estate brokers to work together, each representing one party of the transaction, in order to make a sale. In this case, the commission is split between both brokerage companies.