As used in this chapter "business opportunity" means the sale or lease of any products, equipment, supplies, or services which are sold to the purchaser for the purpose of enabling the purchaser to start a business, for which the purchaser is required to pay the seller a fee which exceeds two hundred fifty dollars, and in which the seller represents:
(1) that he will provide locations or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases or other similar devices, or currency-operated amusement machines or devices, on premises neither owned nor leased by the purchaser or seller; or
(2) that he will purchase any or all products made, produced, fabricated, grown, bred, or modified by the purchaser using in whole or in part, the supplies, services, or chattels sold to the purchaser; or
(3) that he guarantees that the purchaser will derive income from the business opportunity which exceeds the price paid for the business opportunity; or that he will refund all or part of the price paid for the business opportunity, or repurchase any of the products, equipment, supplies, or chattels supplied by the seller, if the purchaser is unsatisfied with the business opportunity; or
(4) the seller will provide a sales program or marketing program which will enable the purchaser to derive income from the business opportunity which exceeds the price paid for the business opportunity; provided, that this subsection does not apply to the sale or a marketing program made in conjunction with the licensing of a registered trademark or service mark.
"Business opportunity" does not include the sale of ongoing businesses when the owner of those businesses sells or intends to sell any portion thereof; provided, a business is not considered an ongoing business unless it has filed income tax returns with the South Carolina Department of Revenue for at least one year; nor does it include the sale of assets or substantially all of the assets of an ongoing business; nor does it include payment for the not-for-profit sale of sales demonstration equipment, material or samples, or where the payment is made for product inventory sold to the purchaser at a bona fide wholesale price; nor does it include the sale or lease of any products, equipment, supplies, or services where the seller has a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than ten million dollars.
HISTORY: 1980 Act No. 474, Section 2; 1986 Act No. 415, eff May 13, 1986; 1988 Act No. 604, Section 1, eff June 1, 1988; 1993 Act No. 181, Section 849, eff July 1, 1993.
Effect of Amendment
The 1986 amendment made grammatical changes; added "for which the purchaser pays to the seller a fee which exceeds $500," in the introductory paragraph; deleted "That upon payment by the purchaser of a fee or sum of money which exceeds fifty dollars to the seller," from item (4); deleted a provision excluding not-for-profit sales of sales demonstration equipment or materials for $500 or less; and added the provision excluding transactions where the seller has a net worth of not less than ten million dollars.
The 1988 amendment made grammatical changes and in the first paragraph changed "five hundred dollars" to "two hundred fifty dollars", and in the last paragraph added language relating to payment for the not-for-profit sale of sales demonstration equipment.
The 1993 amendment revised this section by substituting "Department of Revenue" for "Tax Commission".