Sec. 5. (a) If the
seller represents that the
business opportunity provides earning potential of any kind, the seller shall have data to substantiate the claims of earning potential and shall give to the
investor at the first in
person communication by the seller a copy of this data or a copy of any statement of estimated or projected earning potential prepared for presentation to prospective investors, together with an explanation of the statement. A mathematical computation of the number of sales multiplied by the amount of profit per
sale to reach a projected earnings figure is not sufficient data to substantiate an earnings potential claim for the purposes of this section.
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Terms Used In Indiana Code 24-5-8-5
- Business opportunity: means an investment that:
Indiana Code 24-5-8-1
- Investor: means a person who is solicited to become obligated or does become obligated on a contract. See Indiana Code 24-5-8-1
- Person: means a human being, corporation, limited liability company, partnership, unincorporated association, trust, or governmental entity. See Indiana Code 24-5-8-1
- Sale: includes every contract to sell or dispose of a business opportunity or an interest in a business opportunity for value. See Indiana Code 24-5-8-1
- Seller: means a person, or his agent, who sells or leases or offers to sell or lease a business opportunity. See Indiana Code 24-5-8-1
- Substantial seller: means a seller who has a net worth on a consolidated basis, according to current financial statements certified by an independent certified public accountant, of:
Indiana Code 24-5-8-1
(1) the length of time the seller has been soliciting the particular business opportunity;
(2) the number of investors in the particular business opportunity that were solicited by the seller and known to the seller to have made at least the same sales, earnings, or profits as those represented;
(3) the percentage the number in subdivision (2) represents of the total number of investors in the particular business opportunity that were solicited by the seller; and
(4) the current address of any person named by the seller as having profited from the particular business opportunity, a description of the circumstances under which the profit was earned, and a description of any interest held by the named person in the business opportunity being offered to the investor.
As added by P.L.134-1984, SEC.1. Amended by P.L.252-1987, SEC.3.
