Full Text of SB3131 96th General Assembly
SB3131 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB3131
Introduced 2/8/2010, by Sen. Don Harmon SYNOPSIS AS INTRODUCED: |
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Amends the Business Opportunity Sales Law of 1995. Provides that a required disclosure document must state that a purchaser is to be provided 14 (instead of 10) business days to review the document before signing a contract or agreement or making any payment. Effective immediately.
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A BILL FOR
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SB3131 |
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LRB096 20299 DRJ 35920 b |
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| AN ACT concerning business.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Business Opportunity Sales Law of 1995 is | 5 |
| amended by changing Section 5-35 as follows:
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| (815 ILCS 602/5-35)
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| Sec. 5-35. Disclosure requirements.
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| (a) It shall be unlawful for any person to offer or, sell
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| any business opportunity required to be registered under this
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| Law unless a written disclosure document as filed under | 11 |
| subsection (a) of
Section
5-30 of this Law is delivered to each | 12 |
| purchaser at least 14 days prior to the execution by a | 13 |
| purchaser of any
contract or agreement imposing a binding legal | 14 |
| obligation on the
purchaser or the payment by a purchaser of | 15 |
| any consideration in
connection with the offer or sale of the | 16 |
| business opportunity.
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| (b) The disclosure document shall have a cover sheet which
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| is entitled, in at least 10-point bold type, "DISCLOSURE
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| REQUIRED BY THE STATE OF ILLINOIS." Under the title shall | 20 |
| appear
the statement in at least 10-point bold type that "THE
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| REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES NOT CONSTITUTE
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| APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE STATE OF
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| ILLINOIS. THE INFORMATION CONTAINED IN THIS DISCLOSURE |
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SB3131 |
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LRB096 20299 DRJ 35920 b |
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| DOCUMENT
HAS NOT BEEN VERIFIED BY THIS STATE. IF YOU HAVE ANY | 2 |
| QUESTIONS
OR CONCERNS ABOUT THIS INVESTMENT, SEEK PROFESSIONAL | 3 |
| ADVICE
BEFORE YOU SIGN A CONTRACT OR MAKE ANY PAYMENT. YOU ARE | 4 |
| TO BE
PROVIDED 14 10 BUSINESS DAYS TO REVIEW THIS DOCUMENT | 5 |
| BEFORE SIGNING
ANY CONTRACT OR AGREEMENT OR MAKING ANY PAYMENT | 6 |
| TO THE SELLER OR
THE SELLER'S REPRESENTATIVE". The seller's | 7 |
| name and principal
business address, along with the date of the | 8 |
| disclosure document
shall also be provided on the cover sheet. | 9 |
| No other information
shall appear on the cover sheet. The | 10 |
| disclosure document shall
contain the following information | 11 |
| unless the seller uses a
disclosure document as provided in | 12 |
| paragraph (1) or (2) of subsection (a) of
Section 5-30
of this | 13 |
| Law:
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| (1) The names and residential addresses of those
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| salespersons who will engage in the offer or sale of the
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| business opportunity in this State.
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| (2) The name of the seller, whether the seller is
doing | 18 |
| business as an individual, partnership or corporation;
the | 19 |
| names under which the seller has conducted, is
conducting | 20 |
| or intends to conduct business; and the name of
any parent | 21 |
| or affiliated company that will engage in
business | 22 |
| transactions with purchasers or which will take
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| responsibility for statements made by the seller.
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| (3) The names, addresses and titles of the seller's
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| officers, directors, trustees, general managers, principal
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| executives, agents, and any other persons charged with
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SB3131 |
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LRB096 20299 DRJ 35920 b |
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| responsibility for the seller's business activities | 2 |
| relating
to the sale of the business opportunity.
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| (4) Prior business experience of the seller relating
to | 4 |
| business opportunities including:
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| (A) The name, address, and a description of any
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| business opportunity previously offered by the seller;
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| (B) The length of time the seller has offered
each | 8 |
| such business opportunity; and
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| (C) The length of time the seller has conducted
the | 10 |
| business opportunity currently being offered to the
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| purchaser.
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| (5) With respect to persons identified in item (3) of | 13 |
| this subsection:
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| (A) A description of the persons' business
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| experience for the 10 year period preceding the filing
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| date of this disclosure document. The description of
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| business experience shall list principal occupations
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| and employers; and
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| (B) A listing of the persons' educational and
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| professional backgrounds including, the names of
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| schools attended and degrees received, and any other
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| information that will demonstrate sufficient knowledge
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| and experience to perform the services proposed.
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| (6) Whether the seller or any person identified in
item | 25 |
| (3) of this subsection:
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| (A) Has been convicted of any felony, or pleaded
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| nolo contendere to a felony charge, or has been the
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| subject of any criminal, civil or administrative
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| proceedings alleging the violation of any business
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| opportunity law, securities law, commodities law,
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| franchise law, fraud or deceit, embezzlement,
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| fraudulent conversion, restraint of trade, unfair or
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| deceptive practices, misappropriation of property or
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| comparable allegations;
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| (B) Has filed in bankruptcy, been adjudged
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| bankrupt, been reorganized due to insolvency, or was an
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| owner, principal officer or general partner or any
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| other person that has so filed or was so adjudged or
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| reorganized during or within the last 7 years.
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| (7) The name of the person identified in item (6) of | 15 |
| this
subsection, nature of and parties to
the action or | 16 |
| proceeding, court or other forum, date of the
institution | 17 |
| of the action, docket references to the action,
current | 18 |
| status of the action or proceeding, terms and
conditions or | 19 |
| any order or decree, the penalties or damages
assessed and | 20 |
| terms of settlement.
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| (8) The initial payment required, or when the exact
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| amount cannot be determined, a detailed estimate of the
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| amount of the initial payment to be made to the seller.
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| (9) A detailed description of the actual services the
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| seller agrees to perform for the purchaser.
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| (10) A detailed description of any training the seller
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LRB096 20299 DRJ 35920 b |
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| agrees to provide for the purchaser.
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| (11) A detailed description of services the seller
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| agrees to perform in connection with the placement of
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| equipment, products or supplies at a location, as well as
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| any agreement necessary in order to locate or operate
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| equipment, products or supplies on a premises neither owned
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| nor leased by the purchaser or seller.
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| (12) A detailed description of any license or
permit | 9 |
| that will be necessary in order for the purchaser
to engage | 10 |
| in or operate the business opportunity.
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| (13) The business opportunity seller that is required
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| to secure a bond under Section 5-50 of this Law, shall
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| state in the disclosure document "As required by the State
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| of Illinois, the seller has secured a bond issued by | 15 |
| (insert
name and address of surety company), a surety | 16 |
| company,
authorized to do business in this State. Before | 17 |
| signing a
contract or agreement to purchase this business | 18 |
| opportunity,
you should check with the surety company to | 19 |
| determine the
bond's current status.".
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| (14) Any representations made by the seller to the
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| purchaser concerning sales or earnings that may be made | 22 |
| from
this business opportunity, including, but not limited | 23 |
| to:
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| (A) The bases or assumptions for any actual,
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| average, projected or forecasted sales, profits, | 26 |
| income
or earnings;
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| (B) The total number of purchasers who, within a
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| period of 3 years of the date of the disclosure
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| document, purchased a business opportunity involving
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| the product, equipment, supplies or services being
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| offered to the purchaser; and
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| (C) The total number of purchasers who, within 3
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| years of the date of the disclosure document, purchased
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| a business opportunity involving the product,
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| equipment, supplies or services being offered to the
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| purchaser who, to the seller's knowledge, have | 11 |
| actually
received earnings in the amount or range | 12 |
| specified.
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| (15) Any seller who makes a guarantee to a purchaser
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| shall give a detailed description of the elements of the
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| guarantee. Such description shall include, but shall not be
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| limited to, the duration, terms, scope, conditions and
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| limitations of the guarantee.
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| (16) A statement of:
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| (A) The total number of business opportunities
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| that are the same or similar in nature to those that
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| have been sold or organized by the seller;
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| (B) The names and addresses of purchasers who
have | 23 |
| requested a refund or rescission from the seller
within | 24 |
| the last 12 months and the number of those who
have | 25 |
| received the refund or rescission; and
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| (C) The total number of business opportunities
the |
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LRB096 20299 DRJ 35920 b |
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| seller intends to sell in this State within the
next 12 | 2 |
| months.
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| (17) A statement describing any contractual
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| restrictions, prohibitions or limitations on the | 5 |
| purchaser's
conduct. Attach a copy of all business | 6 |
| opportunity and other
contracts or agreements proposed for | 7 |
| use or in use in this
State including, without limitation, | 8 |
| all lease agreements,
option agreements, and purchase | 9 |
| agreements.
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| (18) The rights and obligations of the seller and the
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| purchaser regarding termination of the business | 12 |
| opportunity
contract or agreement.
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| (19) A statement accurately describing the grounds | 14 |
| upon
which the purchaser may initiate legal action to | 15 |
| terminate
the business opportunity contract or agreement.
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| (20) A copy of the most recent audited financial
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| statement of the seller, prepared within 13 months of the
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| first offer in this State, together with a statement of any
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| material changes in the financial condition of the seller
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| from that date. The Secretary of State may accept the | 21 |
| filing of a reviewed
financial statement in lieu of an | 22 |
| audited financial statement.
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| (21) A list of the states in which this business
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| opportunity is registered.
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| (22) A list of the states in which this disclosure
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| document is on file.
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LRB096 20299 DRJ 35920 b |
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| (23) A list of the states which have denied, suspended
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| or revoked the registration of this business opportunity.
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| (24) A section entitled "Risk Factors" containing a
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| series of short concise statements summarizing the | 5 |
| principal
factors which make this business opportunity a | 6 |
| high risk or
one of a speculative nature. Each statement | 7 |
| shall include a
cross-reference to the page on which | 8 |
| further information
regarding that risk factor can be found | 9 |
| in the disclosure
document.
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| (25) Any additional information as the Secretary of
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| State may require by rule, regulation, or order.
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| (Source: P.A. 96-648, eff. 10-1-09.)
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| Section 99. Effective date. This Act takes effect upon | 14 |
| becoming law.
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