37-25A-23. Net worth or bond requirements for use of income, refund, or repurchase representations.
161 words·~1 min read·
/sd/title-37/chapter-37-25/37-25a-23·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
In connection with the offer or sale of a business opportunity, no seller may make or use any of the representations set forth in subsections 37-25A-1(2)(d) and (2)(e) unless the seller has at all times a minimum net worth of twenty-five thousand dollars as determined in accordance with generally accepted accounting principles. In lieu of the minimum net worth requirement, the director of the Division of Insurance may by rule 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 twenty-five thousand dollars and shall be in favor of this state for the benefit of any purchaser. The director may by rule 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.