South Carolina Code 39-57-30. Written disclosure document required of seller; contents of document
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:
Terms Used In South Carolina Code 39-57-30
- 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. See South Carolina Code 39-57-20 - Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
(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 § 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.