(a) It shall be unlawful for any person to offer or, sell any business opportunity required to be registered under this Law unless a written disclosure document as filed under subsection (a) of Section 5-30 of this Law is delivered to each purchaser at least 14 days prior to the execution by a purchaser of any contract or agreement imposing a binding legal obligation on the purchaser or the payment by a purchaser of any consideration in connection with the offer or sale of the business opportunity.
     (b) The disclosure document shall have a cover sheet which is entitled, in at least 10-point bold type, “DISCLOSURE REQUIRED BY THE STATE OF ILLINOIS.” Under the title shall appear the statement in at least 10-point bold type that “THE REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE STATE OF ILLINOIS. THE INFORMATION CONTAINED IN THIS DISCLOSURE DOCUMENT HAS NOT BEEN VERIFIED BY THIS STATE. IF YOU HAVE ANY QUESTIONS OR CONCERNS ABOUT THIS INVESTMENT, SEEK PROFESSIONAL ADVICE BEFORE YOU SIGN A CONTRACT OR MAKE ANY PAYMENT. YOU ARE TO BE PROVIDED 10 BUSINESS DAYS TO REVIEW THIS DOCUMENT BEFORE SIGNING ANY CONTRACT OR AGREEMENT OR MAKING ANY PAYMENT TO THE SELLER OR THE SELLER’S REPRESENTATIVE”. The seller’s name and principal business address, along with the date of the disclosure document shall also be provided on the cover sheet. No other information shall appear on the cover sheet. The disclosure document shall contain the following information unless the seller uses a disclosure document as provided in paragraph (1) or (2) of subsection (a) of Section 5-30 of this Law:
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Terms Used In Illinois Compiled Statutes 815 ILCS 602/5-35

  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • 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.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • decree: is synonymous with the word "judgment". See Illinois Compiled Statutes 5 ILCS 70/1.24
  • Docket: A log containing brief entries of court proceedings.
  • Embezzlement: In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
  • Fraud: Intentional deception resulting in injury to another.
  • individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See Illinois Compiled Statutes 5 ILCS 70/1.36
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • 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.
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14

         (1) The names and residential addresses of those
    
salespersons who will engage in the offer or sale of the business opportunity in this State.
        (2) The name of the seller, whether the seller is
    
doing business as an individual, partnership or corporation; the names under which the seller has conducted, is conducting or intends to conduct business; and the name of any parent or affiliated company that will engage in business transactions with purchasers or which will take responsibility for statements made by the seller.
        (3) The names, addresses and titles of the seller’s
    
officers, directors, trustees, general managers, principal executives, agents, and any other persons charged with responsibility for the seller’s business activities relating to the sale of the business opportunity.
        (4) Prior business experience of the seller relating
    
to business opportunities including:
            (A) The name, address, and a description of any
        
business opportunity previously offered by the seller;
            (B) The length of time the seller has offered
        
each such business opportunity; and
            (C) The length of time the seller has conducted
        
the business opportunity currently being offered to the purchaser.
        (5) With respect to persons identified in item (3) of
    
this subsection:
            (A) A description of the persons’ business
        
experience for the 10 year period preceding the filing date of this disclosure document. The description of business experience shall list principal occupations and employers; and
            (B) A listing of the persons’ educational and
        
professional backgrounds including, the names of schools attended and degrees received, and any other information that will demonstrate sufficient knowledge and experience to perform the services proposed.
        (6) Whether the seller or any person identified in
    
item (3) of this subsection:
            (A) Has been convicted of any felony, or pleaded
        
nolo contendere to a felony charge, or has been the subject of any criminal, civil or administrative proceedings alleging the violation of any business opportunity law, securities law, commodities law, franchise law, fraud or deceit, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, misappropriation of property or comparable allegations;
            (B) Has filed in bankruptcy, been adjudged
        
bankrupt, been reorganized due to insolvency, or was an owner, principal officer or general partner or any other person that has so filed or was so adjudged or reorganized during or within the last 7 years.
        (7) The name of the person identified in item (6) of
    
this subsection, nature of and parties to the action or proceeding, court or other forum, date of the institution of the action, docket references to the action, current status of the action or proceeding, terms and conditions or any order or decree, the penalties or damages assessed and terms of settlement.
        (8) The initial payment required, or when the exact
    
amount cannot be determined, a detailed estimate of the amount of the initial payment to be made to the seller.
        (9) A detailed description of the actual services the
    
seller agrees to perform for the purchaser.
        (10) A detailed description of any training the
    
seller agrees to provide for the purchaser.
        (11) A detailed description of services the seller
    
agrees to perform in connection with the placement of equipment, products or supplies at a location, as well as any agreement necessary in order to locate or operate equipment, products or supplies on a premises neither owned nor leased by the purchaser or seller.
        (12) A detailed description of any license or permit
    
that will be necessary in order for the purchaser to engage in or operate the business opportunity.
        (13) The business opportunity seller that is required
    
to secure a bond under Section 5-50 of this Law, shall state in the disclosure document “As required by the State of Illinois, the seller has secured a bond issued by (insert name and address of surety company), a surety company, authorized to do business in this State. Before signing a contract or agreement to purchase this business opportunity, you should check with the surety company to determine the bond’s current status.”.
        (14) Any representations made by the seller to the
    
purchaser concerning sales or earnings that may be made from this business opportunity, including, but not limited to:
            (A) The bases or assumptions for any actual,
        
average, projected or forecasted sales, profits, income or earnings;
            (B) The total number of purchasers who, within a
        
period of 3 years of the date of the disclosure document, purchased a business opportunity involving the product, equipment, supplies or services being offered to the purchaser; and
            (C) The total number of purchasers who, within 3
        
years of the date of the disclosure document, purchased a business opportunity involving the product, equipment, supplies or services being offered to the purchaser who, to the seller’s knowledge, have actually received earnings in the amount or range specified.
        (15) Any seller who makes a guarantee to a purchaser
    
shall give a detailed description of the elements of the guarantee. Such description shall include, but shall not be limited to, the duration, terms, scope, conditions and limitations of the guarantee.
        (16) A statement of:
             (A) The total number of business opportunities
        
that are the same or similar in nature to those that have been sold or organized by the seller;
            (B) The names and addresses of purchasers who
        
have requested a refund or rescission from the seller within the last 12 months and the number of those who have received the refund or rescission; and
            (C) The total number of business opportunities
        
the seller intends to sell in this State within the next 12 months.
        (17) A statement describing any contractual
    
restrictions, prohibitions or limitations on the purchaser’s conduct. Attach a copy of all business opportunity and other contracts or agreements proposed for use or in use in this State including, without limitation, all lease agreements, option agreements, and purchase agreements.
        (18) The rights and obligations of the seller and the
    
purchaser regarding termination of the business opportunity contract or agreement.
        (19) A statement accurately describing the grounds
    
upon which the purchaser may initiate legal action to terminate the business opportunity contract or agreement.
        (20) A copy of the most recent audited financial
    
statement of the seller, prepared within 13 months of the first offer in this State, together with a statement of any material changes in the financial condition of the seller from that date. The Secretary of State may accept the filing of a reviewed financial statement in lieu of an audited financial statement.
        (21) A list of the states in which this business
    
opportunity is registered.
        (22) A list of the states in which this disclosure
    
document is on file.
        (23) A list of the states which have denied,
    
suspended or revoked the registration of this business opportunity.
        (24) A section entitled “Risk Factors” containing a
    
series of short concise statements summarizing the principal factors which make this business opportunity a high risk or one of a speculative nature. Each statement shall include a cross-reference to the page on which further information regarding that risk factor can be found in the disclosure document.
        (25) Any additional information as the Secretary of
    
State may require by rule, regulation, or order.
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