Bill Text: IL SB3131 | 2009-2010 | 96th General Assembly | Introduced

---

Bill Title: 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-06-27 - Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB3131 Detail]

Download: Illinois-2009-SB3131-Introduced.html

---

96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB3131 Introduced 2/8/2010, by Sen. Don Harmon SYNOPSIS AS INTRODUCED:
815 ILCS 602/5-35
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.
LRB096 20299 DRJ 35920 b
A BILL FOR
SB3131 LRB096 20299 DRJ 35920 b
AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Business Opportunity Sales Law of 1995 is
amended by changing Section 5-35 as follows:
(815 ILCS 602/5-35)
Sec. 5-35. Disclosure requirements.
(a) It shall be unlawful for any person to offer or, sell
any business opportunity required to be registered under this
Law unless a written disclosure document as filed under
subsection (a) of Section 5-30 of this Law is delivered to each
purchaser at least 14 days prior to the execution by a
purchaser of any contract or agreement imposing a binding legal
obligation on the purchaser or the payment by a purchaser of
any consideration in connection with the offer or sale of the
business opportunity.
(b) The disclosure document shall have a cover sheet which
is entitled, in at least 10-point bold type, "DISCLOSURE
REQUIRED BY THE STATE OF ILLINOIS." Under the title shall
appear the statement in at least 10-point bold type that "THE
REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES NOT CONSTITUTE
APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE STATE OF
ILLINOIS. THE INFORMATION CONTAINED IN THIS DISCLOSURE

SB3131 - 2 - LRB096 20299 DRJ 35920 b
DOCUMENT HAS NOT BEEN VERIFIED BY THIS STATE. IF YOU HAVE ANY
QUESTIONS OR CONCERNS ABOUT THIS INVESTMENT, SEEK PROFESSIONAL
ADVICE BEFORE YOU SIGN A CONTRACT OR MAKE ANY PAYMENT. YOU ARE
TO BE PROVIDED 14 10 BUSINESS DAYS TO REVIEW THIS DOCUMENT
BEFORE SIGNING ANY CONTRACT OR AGREEMENT OR MAKING ANY PAYMENT
TO THE SELLER OR THE SELLER'S REPRESENTATIVE". The seller's
name and principal business address, along with the date of the
disclosure document shall also be provided on the cover sheet.
No other information shall appear on the cover sheet. The
disclosure document shall contain the following information
unless the seller uses a disclosure document as provided in
paragraph (1) or (2) of subsection (a) of Section 5-30 of this
Law:
(1) The names and residential addresses of those
salespersons who will engage in the offer or sale of the
business opportunity in this State.
(2) The name of the seller, whether the seller is doing
business as an individual, partnership or corporation; the
names under which the seller has conducted, is conducting
or intends to conduct business; and the name of any parent
or affiliated company that will engage in business
transactions with purchasers or which will take
responsibility for statements made by the seller.
(3) The names, addresses and titles of the seller's
officers, directors, trustees, general managers, principal
executives, agents, and any other persons charged with

SB3131 - 3 - LRB096 20299 DRJ 35920 b
responsibility for the seller's business activities
relating to the sale of the business opportunity.
(4) Prior business experience of the seller relating to
business opportunities including:
(A) The name, address, and a description of any
business opportunity previously offered by the seller;
(B) The length of time the seller has offered each
such business opportunity; and
(C) The length of time the seller has conducted the
business opportunity currently being offered to the
purchaser.
(5) With respect to persons identified in item (3) of
this subsection:
(A) A description of the persons' business
experience for the 10 year period preceding the filing
date of this disclosure document. The description of
business experience shall list principal occupations
and employers; and
(B) A listing of the persons' educational and
professional backgrounds including, the names of
schools attended and degrees received, and any other
information that will demonstrate sufficient knowledge
and experience to perform the services proposed.
(6) Whether the seller or any person identified in item
(3) of this subsection:
(A) Has been convicted of any felony, or pleaded

SB3131 - 4 - LRB096 20299 DRJ 35920 b
nolo contendere to a felony charge, or has been the
subject of any criminal, civil or administrative
proceedings alleging the violation of any business
opportunity law, securities law, commodities law,
franchise law, fraud or deceit, embezzlement,
fraudulent conversion, restraint of trade, unfair or
deceptive practices, misappropriation of property or
comparable allegations;
(B) Has filed in bankruptcy, been adjudged
bankrupt, been reorganized due to insolvency, or was an
owner, principal officer or general partner or any
other person that has so filed or was so adjudged or
reorganized during or within the last 7 years.
(7) The name of the person identified in item (6) of
this subsection, nature of and parties to the action or
proceeding, court or other forum, date of the institution
of the action, docket references to the action, current
status of the action or proceeding, terms and conditions or
any order or decree, the penalties or damages assessed and
terms of settlement.
(8) The initial payment required, or when the exact
amount cannot be determined, a detailed estimate of the
amount of the initial payment to be made to the seller.
(9) A detailed description of the actual services the
seller agrees to perform for the purchaser.
(10) A detailed description of any training the seller

SB3131 - 5 - LRB096 20299 DRJ 35920 b
agrees to provide for the purchaser.
(11) A detailed description of services the seller
agrees to perform in connection with the placement of
equipment, products or supplies at a location, as well as
any agreement necessary in order to locate or operate
equipment, products or supplies on a premises neither owned
nor leased by the purchaser or seller.
(12) A detailed description of any license or permit
that will be necessary in order for the purchaser to engage
in or operate the business opportunity.
(13) The business opportunity seller that is required
to secure a bond under Section 5-50 of this Law, shall
state in the disclosure document "As required by the State
of Illinois, the seller has secured a bond issued by
(insert name and address of surety company), a surety
company, authorized to do business in this State. Before
signing a contract or agreement to purchase this business
opportunity, you should check with the surety company to
determine the bond's current status.".
(14) Any representations made by the seller to the
purchaser concerning sales or earnings that may be made
from this business opportunity, including, but not limited
to:
(A) The bases or assumptions for any actual,
average, projected or forecasted sales, profits,
income or earnings;

SB3131 - 6 - LRB096 20299 DRJ 35920 b
(B) The total number of purchasers who, within a
period of 3 years of the date of the disclosure
document, purchased a business opportunity involving
the product, equipment, supplies or services being
offered to the purchaser; and
(C) The total number of purchasers who, within 3
years of the date of the disclosure document, purchased
a business opportunity involving the product,
equipment, supplies or services being offered to the
purchaser who, to the seller's knowledge, have
actually received earnings in the amount or range
specified.
(15) Any seller who makes a guarantee to a purchaser
shall give a detailed description of the elements of the
guarantee. Such description shall include, but shall not be
limited to, the duration, terms, scope, conditions and
limitations of the guarantee.
(16) A statement of:
(A) The total number of business opportunities
that are the same or similar in nature to those that
have been sold or organized by the seller;
(B) The names and addresses of purchasers who have
requested a refund or rescission from the seller within
the last 12 months and the number of those who have
received the refund or rescission; and
(C) The total number of business opportunities the

SB3131 - 7 - LRB096 20299 DRJ 35920 b
seller intends to sell in this State within the next 12
months.
(17) A statement describing any contractual
restrictions, prohibitions or limitations on the
purchaser's conduct. Attach a copy of all business
opportunity and other contracts or agreements proposed for
use or in use in this State including, without limitation,
all lease agreements, option agreements, and purchase
agreements.
(18) The rights and obligations of the seller and the
purchaser regarding termination of the business
opportunity contract or agreement.
(19) A statement accurately describing the grounds
upon which the purchaser may initiate legal action to
terminate the business opportunity contract or agreement.
(20) A copy of the most recent audited financial
statement of the seller, prepared within 13 months of the
first offer in this State, together with a statement of any
material changes in the financial condition of the seller
from that date. The Secretary of State may accept the
filing of a reviewed financial statement in lieu of an
audited financial statement.
(21) A list of the states in which this business
opportunity is registered.
(22) A list of the states in which this disclosure
document is on file.

SB3131 - 8 - LRB096 20299 DRJ 35920 b
(23) A list of the states which have denied, suspended
or revoked the registration of this business opportunity.
(24) A section entitled "Risk Factors" containing a
series of short concise statements summarizing the
principal factors which make this business opportunity a
high risk or one of a speculative nature. Each statement
shall include a cross-reference to the page on which
further information regarding that risk factor can be found
in the disclosure document.
(25) Any additional information as the Secretary of
State may require by rule, regulation, or order.
(Source: P.A. 96-648, eff. 10-1-09.)
Section 99. Effective date. This Act takes effect upon
becoming law.