HB1264 - REGULATION OF BUSINESS OPPORTUNITIES - Green, Timothy P.
HB1264 REGULATES BUSINESS OPPORTUNITY OFFERINGS AND INVESTMENTS.
Sponsor: Green, Timothy P. (73) Effective Date: 00/00/00
CoSponsor: LR Number: 1779-01
Last Action: 01/29/96 - Referred: Commerce (H)
HB1264
Next Hearing:Hearing not scheduled
Calendar:Bill currently not on calendar
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Available Bill Summaries for HB1264
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Available Bill Text for HB1264
| Introduced |

Available Fiscal Notes for HB1264

BILL SUMMARIES

INTRODUCED

HB 1264 -- Regulation of Business Opportunities

Sponsor:  Green

This bill regulates business opportunities for which a buyer has
paid $100 or more and from which a buyer intends to start a
business.  The provisions of this bill apply to any business
which advertises business opportunities, and any business
opportunities for which the seller represents that locations or
assistance in finding locations for vending machines, display
cases, or similar devices will be provided; that the seller will
purchase products made or produced by the buyer from the
products or services purchased from the seller; that a written
guarantee will be given to the buyer insuring that the buyer
will realize income exceeding the amount paid for the business
opportunity or a refund or repurchase of the products purchased
will be made by the seller; or that the seller provides to the
buyer a sales or marketing program for non-trademark goods or
products.

The seller is required to provide the buyer with a written
disclosure document, to include the seller's name, description
of the services the seller will provide, the seller's current
financial statement, information on any felony convictions or
guilty or nolo contendre pleas to felony charges during the
previous 7 fiscal years, any civil actions or injunctive or
restrictive orders affecting the seller, any bankruptcy or
insolvency proceedings affecting the seller, a copy of the
business opportunity contract, and a number of statements
providing consumer protections to the buyer.  A copy of the
disclosure statement must be filed with the Securities Division
of the Secretary of State's Office before any advertisements may
be placed or any representations about the business opportunity
may be made, and must be updated at least annually.  After the
disclosure is filed, an advertisement identification number will
be issued by the Secretary of State's office which must be
disclosed to any media with whom the seller is placing
advertisement.  An annual fee of $300 will be remitted by each
seller to the Secretary of State's office and deposited into the
newly created Business Opportunities Regulation Fund, for the
costs of administering and enforcing the bill's provisions.
Failure to file the disclosure statement or pay the required fee
is a Class A misdemeanor.

Any seller who guarantees in writing that income will be derived
from the business opportunity is required to obtain a bond,
trust account, or guaranteed letter of credit for at least
$50,000, against which anyone damaged by the seller's breach of
contract may recover damages, including attorney's fees.

The seller may not in any way misrepresent information about the
products, market areas, assistance available, income potential,
sponsorship of products, or other issues related to the business
opportunity.  Those who violate the prohibitions on
misrepresentations are guilty of a Class A misdemeanor.

Certain breaches by the seller entitle the buyer to rescind the
contract, upon written notice to the seller and within one year
of the date of the execution of the contract.

The Securities Division and the Attorney General will enforce
the provisions of the bill, and may bring civil actions in
circuit court, including seeking a civil penalty not to exceed
$5,000 per violation.


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Last Updated October 30, 1996 at 10:51 am