At least forty-eight hours prior to the time the purchaser signs a business opportunity contract, or at least forty-eight hours prior to the receipt of any consideration by the seller, whichever occurs first, the seller shall provide the prospective purchaser a written document, the cover sheet of which is entitled in at least 10-point bold face capital letters "DISCLOSURES REQUIRED BY SOUTH CAROLINA LAW".
Under this title shall appear the statement in at least 10-point type that "The State of South Carolina has not reviewed and does not approve, recommend, endorse or sponsor any business opportunity. The information contained in this disclosure has not been verified by the State. If you have any questions about this investment, see an attorney before you sign a contract or agreement." Nothing except the title and required statement shall appear on the cover sheet. The disclosure document shall contain the following information:
(1) The name of the seller, whether the seller is doing business as an individual, partnership, or corporation, the names under which the seller has done, is doing or intends to do business, and the name of any parent or affiliated company that will engage in business transactions with purchasers or who takes responsibility for statements made by the seller.
(2) The names, addresses and titles of the seller's officers, directors, trustees, general partners, general managers, principal executives, and any other persons charged with responsibility for the seller's business activities relating to the sale of business opportunities.
(3) The length of time the seller has:
(a) Sold business opportunities;
(b) Sold business opportunities involving the product, equipment, supplies or services currently being offered to the purchaser.
(4) A full and detailed description of the actual services that the business opportunity seller undertakes to perform for the purchaser.
(5) A copy of a financial statement not older than thirteen months of the seller, updated to reflect any material changes in the seller's financial condition which shall either be an audited statement or shall be stated under penalty of perjury by the seller or his authorized agent.
(6) If training of any type is promised by the seller, the disclosure statement must set forth a complete description of the training and the length of the training. If a fee is to be charged for such training, the seller shall set forth in detail an itemization of all costs to be covered by the fee.
(7) If the seller promises services to be performed in connection with the placement of the equipment, product or supplies at various locations, the disclosure statement shall set forth the full nature of those services as well as the nature of the agreements to be made with the owners or managers of these locations where the purchaser's equipment, product or supplies will be placed.
(8) If the business opportunity seller is required to secure a bond or establish a trust deposit pursuant to Section 39-57-40, the document shall state either:
(a) "As required by South Carolina law, the seller has secured a bond issued by _ (name and address of surety company) __________ a surety company authorized to do business in this State. Before signing a contract to purchase this business opportunity, you should check with the surety company to determine the bond's current status." or
(b) "As required by South Carolina law, the seller has established a trust account ___ (number of account) __________ with ___ (name and address __________ of bank or savings institution __________. Before signing a contract to purchase this business opportunity, you should check with the bank or savings institution to determine the current status of the trust account."
(9) The following statement:
"If the seller fails to deliver the product, equipment or supplies necessary to begin substantial operation of the business within forty-five days of the delivery date stated in your contract, you may notify the seller in writing and demand that the contract be cancelled."
(10) If the seller makes any statement concerning sales or earnings, or range of sales or earnings that may be made through this business opportunity, the document must disclose:
(a) The total number of purchasers of business opportunities involving the product, equipment, supplies or services being offered who to the seller's knowledge have actually received earnings in the amount or range specified, within three years prior to the date of the disclosure statement.
(b) The total number of purchasers of business opportunities involving the product, equipment, supplies or services being offered within three years prior to the date of the disclosure statement.
HISTORY: 1980 Act No. 474, Section 3.