Sec. 5-50. Minimum net worth or bond requirement.
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/il/chapter-815/act-602/5-50A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Sec. 5-50. Minimum net worth or bond requirement.
(a)In connection with the offer or sale of a business opportunity, no seller may make or use any of the representations set forth in Section 5-5.10(a)(4) and Section 5-5.10(a)(5) of this Law unless the seller has at all times a minimum net worth of $25,000 as determined in accordance with generally accepted accounting principles. In lieu of the minimum net worth requirement, the Secretary of State may, by rule, regulation, or order, require a business opportunity seller to obtain a surety bond issued by a surety company authorized to do business in this State. The surety bond shall be in an amount not less than $25,000 and shall be in favor of this State for the benefit of any purchaser. The Secretary of State may by rule, regulation, or order, increase the amount of the bond for the protection of purchasers and may require the seller to file reports of all sales in this State to determine the appropriate amount of bond.
(b)Where the seller is required to obtain a surety bond, the seller shall maintain a surety bond for the duration of the guarantee or representation giving rise to the surety bond requirement. Upon expiration of the period of the guarantee, the seller may allow the surety bond to lapse provided that the seller shall give notice to the Secretary of State and all business opportunity purchasers in this State at least 30 days prior to the lapse of the bond.