SB 0917 Regulates business opportunities
LR Number:3226L.01I Fiscal Note:3226-01
Committee:Financial and Governmental Organization
Last Action:02/28/00 - Hearing Conducted S Financial & Governmental Journal page:
Organizations Committee
Effective Date:August 28, 2000
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Current Bill Summary

SB 917 - This act regulates business opportunities. A business opportunity is the sale or lease of any products, equipment, supplies or services which are sold to a purchaser to enable the purchaser to start a business. The purchaser is required to pay the seller an initial fee. In return, the seller will assist the purchaser with getting started in the business and will guarantee that the purchaser will derive income from the business opportunity.

This act specifies that a seller will provide a prospective purchaser a disclosure statement at least three days before the purchaser signs a business opportunity contract. The disclosure statement will contain information about the seller including information about the services that the seller will undertake for the purchaser and information about the finances of the business opportunity.

The statement should also disclose if the seller or anyone charged with the responsibility for the seller's business activities, has been convicted of a felony or been held liable in a civil action involving allegations of fraud. Whether the seller has filed a bankruptcy should also be disclosed.

This act establishes requirements for the registration of business opportunities with the Secretary of State. An annual fee of three hundred dollars is collected from the seller by the Secretary of State's office. All money collected will be deposited in the "Business Opportunities Fund" which is created in this act and is used for the administration of this act. Any seller who fails to register and pay the fee is guilty of a Class A misdemeanor.

A purchaser of a business opportunity may rescind a contract if a seller uses untrue or misleading statements in the sale of the business opportunity, fails to give proper disclosures or deliver the equipment necessary to begin operation of the business.

This act establishes penalties for violations. The Commissioner of Securities may issue an order denying effectiveness of business opportunity registration if in the public interest. Any interested person who is aggrieved by any order of the Commissioner of Securities is entitled to a hearing.

Provisions similar to this act are also contained in Truly Agreed To CCS/HS/HCS/SB 896.