Sale of Business Opportunities -
9 AAC 16.010 - 9 AAC 16.900
9 AAC 16.010. Registration
- An initial registration and any renewal of that registration must be
- submitted using the department's form entitled Alaska Business Opportunity Registration and Registration Renewal Application, as revised as of February 9, 2005 and adopted by reference; and
- made under penalty of unsworn falsification in violation of AS 11.56.210.
- Unless the department issues an order under AS 45.66.200 (b) denying registration or registration renewal, a registration or registration renewal is complete for purposes of AS 45.66.010 on the date that the person seeking registration receives the department acknowledgment required under AS 45.66.020 (c). The department will send the acknowledgment to the seller's mailing address identified in the form submitted under (a) of this section.
9 AAC 16.020. Disclosure statement
- A seller must file with the department a completed disclosure statement on the department's form entitled Alaska Business Opportunity Disclosure Statement, as revised as of February 9, 2005 and adopted by reference.
- The disclosure statement must have a cover sheet that contains all of the following information, and no other information:
- a title, in not less than 12-point, uppercase, bold typeface, "DISCLOSURES REQUIRED BY ALASKA LAW";
- underneath the title, the following statement, in at least 12-point, uppercase, bold typeface:
"NOTICE TO BUYERS:
UNDER ALASKA LAW, A PERSON WHO SELLS A BUSINESS OPPORTUNITY MUST REGISTER WITH THE STATE OF ALASKA'S DEPARTMENT OF LAW. REGISTRATION DOES NOT MEAN THAT THE STATE RECOMMENDS OR APPROVES THE BUSINESS OPPORTUNITY.
THE SELLER OF THE BUSINESS OPPORTUNITY IS REQUIRED TO GIVE YOU A DISCLOSURE STATEMENT. THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION ABOUT THE BUSINESS OPPORTUNITY AND THE PERSON SELLING IT. YOU SHOULD READ IT CAREFULLY.
THE SELLER MUST GIVE THIS DISCLOSURE STATEMENT TO YOU AT LEAST 10 CALENDAR DAYS BEFORE YOU SIGN A CONTRACT OR MAKE A PAYMENT. IF YOU HAVE ANY QUESTIONS OR CONCERNS ABOUT THIS INVESTMENT, YOU SHOULD TALK WITH AN ATTORNEY OR FINANCIAL ADVISOR BEFORE YOU SIGN A CONTRACT, OR CONTACT THE DEPARTMENT OF LAW FOR ADDITIONAL INFORMATION ABOUT THE BUSINESS OPPORTUNITY."
- the seller's name, the seller's principal business address, and the date the disclosure statement is given to the buyer or potential buyer; the information required in this paragraph must be provided conspicuously on the cover sheet.
9 AAC 16.030. Surety bond
- A seller must submit to the department a surety bond in the amount of $75,000 in favor of the state for the benefit of any buyer who is damaged by the breach of contract between the seller and buyer, by the breach of any obligation arising from that contract, or by the violation of a requirement in AS 45.66 or this chapter. The department may require a seller to file reports of all sales in the state to determine whether an increase in the amount of the bond is necessary to protect the public interest.
- The seller shall maintain the surety bond for the duration of the period the seller is selling or offering to sell business opportunities in the state and for a period of three years after the date of the last sale of a business opportunity in the state.
- A surety bond required under this section must use the department's form entitled Alaska Business Opportunity Bond, as revised as of February 9, 2005 and adopted by reference.
9 AAC 16.040. Written contract required
- The seller shall include in a contract or agreement provided to a buyer or prospective buyer the information required under AS 45.66.090 and this section. The information must be set out in at least 12-point typeface.
- In the contract or agreement, the seller shall include a detailed description of the business opportunity being offered.
- Payment terms to be provided under AS 45.66.090 (1) must include
- any down payment required under the contract;
- any initial payment required under the contract;
- any additional payment required under the contract; and
- a statement that if the contract requires a buyer to pay as a down payment more than 20 percent of the initial payment before delivery to the buyer of the equipment, supplies, products, or services to be furnished under the terms of the contract, the excess above the 20 percent must be placed in an escrow account that meets the requirements of AS 45.66.110 ; the contract must clearly state the name and address of the financial institution where the escrow account is located and the escrow account number.
- In the contract or agreement, the seller shall include the name, mailing address, physical address, and telephone number of
- the seller;
- each of the seller's agents in the state;
- each of the seller's representatives in the state; and
- each supplier of products, equipment, or supplies that the seller is to deliver to the buyer.
- In addition to providing, under AS 45.66.090 (3), a statement of the form of the seller's business organization, the contract must identify the state where the seller is incorporated or organized.
- In providing, under AS 45.66.090 (5), the delivery date of the product, equipment, or supplies being sold or leased, a contract that provides for the periodic delivery of items to the buyer must provide each expected delivery date of the products, equipment, or supplies that the seller is to deliver to the buyer.
- To comply with AS 45.66.090 (7), the seller must include in the contract the following statement, conspicuously placed, and in no less than 12-point bold typeface:
STATEMENT OF BUYER'S RIGHT TO CANCEL
- Under Alaska law, a buyer of a business opportunity may cancel a contract for any reason if the buyer gives notice of the cancellation to the seller within thirty (30) days after signing the contract.
- A buyer may cancel the contract at any time if the seller engages in any of the following conduct:
- fails to comply with the disclosure requirements under AS 45.66.080 or fails to provide a written purchase contract under AS 45.66.090 ;
- uses untrue, misleading, incomplete, or deceptive statements in any aspect of advertising, promoting, selling, or offering a business opportunity;
- fails, within 30 days after the delivery date specified in the contract, to deliver the products, equipment, supplies, or services required under the contract in order to begin substantial operation of the business opportunity;
- fails to provide a location for the business to be started under the contract if the contract requires the seller to provide a location.
- A notice of cancellation does not have to be on a particular form, but it must be in writing and state the buyer's intention to end the contract.
- Within 15 days after the notice of cancellation, the seller shall refund to the buyer all payments made and terminate all financial obligations of the buyer. Within 5 days after receiving the refund, the buyer must make available to the seller, at a reasonable time and place, any products, equipment, or supplies delivered by the seller.
9 AAC 16.050. Fees
The seller must pay a registration fee of $300. To renew a registration the seller must pay a registration renewal fee of $150. Fees must be paid by cashier's check or money order, payable to the State of Alaska.
9 AAC 16.060. Change in information
- Any statement required under AS 45.66.050 for a material change in information must be
- submitted using the department's form entitled Alaska Business Opportunity Notice of Material Change in Information, as revised as of February 9, 2005 and adopted by reference; and
- made under penalty of unsworn falsification in violation of AS 11.56.210.
- To be timely filed, the statement required under AS 45.66.050 must be
- hand delivered to the department's Anchorage office within 10 days after the material change; or
- sent by certified mail, return receipt requested, to the department's Anchorage office within 10 days after the material change.
- The department will consider a change in information provided under AS 45.66.020 or 45.66.030 to be a material change if a substantial likelihood exists that a reasonable prospective buyer would consider the change significant in making a decision to purchase the business opportunity. Material changes include
- a change in the surety or in the status or expiration date of the bond required under AS 45.66.060;
- an increase or decrease in the initial payment or additional payments charged by the seller;
- a change in the seller's management or in the owner of the seller;
- a change in the seller's or buyer's obligations under the contract or related agreements;
- the initiation of, or a significant change in the status of, a civil, criminal, or administrative action or proceeding in which the seller, the seller's agent, or the seller's representative is a party, and involving a charge or allegation set out in AS 45.66.020 (b)(3); for purposes of this paragraph,
- the initiation of a civil, criminal, or administrative action or proceeding includes the filing of a complaint or indictment; and
- a significant change in the status of a civil, criminal, or administrative action or proceeding includes entry of a judgment or order relating to any business opportunity offered by the seller, the seller's agent, or the seller's representative.
9 AAC 16.900. Definitions
In AS 45.66 and this chapter, unless the context requires otherwise,
- "affiliated company" means a business entity that
- will engage in business transactions with buyers relating to the sale of a business opportunity; or
- accepts responsibility for the acts or statements made by the seller relating to sales or offers to sell business opportunities;
- "department" means the Department of Law;
- "down payment" has the meaning given in AS 45.66.100;
- "initial payment" has the meaning given in AS 45.66.100;
- "owner" means a person who owns or controls 10 percent or more of the net income of a business entity;
- "parent company" means a business entity that
- is an owner of the seller; and
- has authority to control the employment or appointment of officers, directors, or managers of the seller.