New Hampshire Revised Statutes 358-E:3 – Registration
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I. Unless exempted by paragraph V, any person who advertises, offers, contracts, sells or promotes any distributorship in the state must register with the attorney general and file, in a form prescribed by the attorney general, an application which shall contain the following documents and information:
(a) An irrevocable appointment of the attorney general to receive service of any lawful process in any noncriminal proceeding arising under this chapter against the grantor or his personal representatives;
(b) The official name and address and principal place of business of the grantor and the parent firm or holding company of the grantor, if any;
(c) The business experience stated individually of each of the grantor’s directors and officers including the biographical data concerning all such persons;
(d) The business experience of the grantor, including the length of time the grantor has conducted a business of the type to be operated by the distributor, has granted distributorships for such business, and has granted distributorships in other lines of business;
(e) Where such is the case, a statement that the grantor or any of its current directors or officers:
(1) Has been held liable in a civil action by final judgment, convicted of a felony or pled nolo contendere to a felony charge if such felony or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property for the most recent 7 year period;
(2) Is subject to any currently effective state or federal agency injunctive or restrictive order relating to or affecting distributorship activities or the grantor/distributor relationship;
(3) Has filed in bankruptcy or has been associated as a director or officer of any company that has filed bankruptcy or reorganization proceedings for the most recent 7 year period;
(4) Has been a party to any cause of action brought by distributors against the grantor for the most recent 7 year period which resulted either in an out-of-court settlement or a judgment against the grantor; and
(5) Is presently a party to any cause of action brought by a distributor against the grantor;
such statement shall set forth the identity and location of the court, date of conviction or judgment, and penalty imposed or damages assessed, and the date, nature, and issuer of each such order or ruling;
(f) A copy of any contracts, agreements, brochures or other documents relating to the distributorship;
(g) A factual description of the distributorship offered to be sold and of the services, training and assistance which will be provided by the grantor to the distributor;
(h) A statement describing the total funds which must be paid by the distributor to the grantor in order to obtain or commence the distributorship operation, such as deposits, down payments and fees; and, if all or part of these fees or deposits are returnable under certain conditions, these conditions should be set forth; and, if not returnable, such fact shall be disclosed;
(i) A statement describing the recurring fees required to be paid, in connection with carrying on the distributorship business, by the distributor to the grantor;
(j) If the grantor proposes to use estimated or projected distributorship sales or earnings, a statement of such estimates or projections together with an explanation of the bases and assumptions underlying such estimates or projections and any supportive data;
(k) A statement disclosing:
(1) The number of distributorships operating at the end of the last calendar year; and
(2) The names and addresses of all distributorships located in this state;
(l) A statement describing any services, supplies, products, signs, fixtures, or equipment relating to the establishment or the operating of the distributorship which the distributor is required to purchase, lease or rent directly or indirectly from the grantor;
(m) A statement of whether the grantor will receive any income or other consideration from suppliers of goods or services required or suggested to be purchased by the distributor;
(n) A statement of the terms and conditions of any financing arrangement offered directly or indirectly by the grantor; and a statement of whether the grantor will receive any payments from any person for the placement of financing with such person;
(o) A statement whether, by the terms of the distributorship agreement or other device or practice, the distributor is limited in the goods or services he may offer for sale, or limited in the customers to whom he may sell such goods or services or is promised an exclusive or protected territory in which he may sell such goods or services;
(p) A statement disclosing the conditions and terms under which the grantor allows the distributor to sell, lease, assign, or otherwise transfer his distributorship, or any interest therein and the amount of consideration which must be paid to the grantor for such sale, lease, assignment or transfer, if any;
(q) A statement disclosing:
(1) The conditions under which the distributorship agreement may be terminated by the grantor, renewal may be refused, or the distributorship may be repurchased by the grantor at its option;
(2) The number, stated for each category, of distributorships which were terminated, renewal refused or repurchased during the preceding calendar year and a complete explanation thereof; and
(3) The conditions under which the distributorship agreement may be terminated by the distributor and the number of distributorships voluntarily terminated by distributors during the preceding calendar year;
(r) The disclosure statement required by N.H. Rev. Stat. § 358-E:4, if in different form than the application; and
(s) Any other information required by rule adopted by the attorney general, pursuant to RSA 541-A.
II. The grantor shall file with the attorney general a financial statement of the grantor, audited by an independent certified public accountant, as of the close of the most recent fiscal year of the grantor. If any material changes in the financial condition of the grantor occur after such statement is prepared, the grantor must disclose such changes and explain their significance to the operation of a distributorship. The attorney general may, in his discretion, waive the requirement for audited statements for grantors who have not previously had such certified audits, provided the unaudited financial statement is prepared by an independent certified public accountant. If the grantor is controlled by any person who absolutely and unconditionally guarantees to assume the duties and obligations of the grantor under the distributorship agreement should the grantor become unable to perform, the attorney general may, in his discretion, accept a consolidated financial statement from the grantor and such person. If the attorney general finds that a grantor has failed to demonstrate that adequate financial arrangements have been made to fulfill the obligations set forth in the distributorship agreement, the attorney general may require the escrow or impoundment of fees and other funds paid by the distributor or distributors until such obligations have been fulfilled, or, at the option of the grantor, the furnishing of a surety bond as provided by rule or order of the attorney general, if he finds that such requirement is necessary and appropriate to protect distributors.
III. Upon satisfactory submission of the information and documents required by paragraphs I and II and the payment of a registration fee of $50, the attorney general shall issue a certificate stating that the distributorship has been registered.
IV. The attorney general may accept any registration filed with agencies of the United States or any other state, in lieu of the filing required by this chapter, if he determines the acceptance of such registration will adequately protect the public.
V. The attorney general may from time to time by order exempt from the provisions of this chapter any distributorship if he finds that the enforcement of all the provisions of this chapter with respect to such distributorship is not necessary in the public interest and for the protection of distributors due to the limited character of the distributorship, or the small amount of money involved or because such distributorship is, in the judgment of the attorney general, otherwise adequately regulated by federal or state law or because such distributorship has been registered and approved pursuant to the laws of the United States or any other state.
VI. The grantor shall immediately notify the attorney general of any material change in information contained in the application for registration and shall make appropriate amendment of the disclosure statement.
VII. [Repealed.]
(a) An irrevocable appointment of the attorney general to receive service of any lawful process in any noncriminal proceeding arising under this chapter against the grantor or his personal representatives;
Terms Used In New Hampshire Revised Statutes 358-E:3
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- 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.
- Conviction: A judgement of guilt against a criminal defendant.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Distributor: means a person to whom a distributorship is granted. See New Hampshire Revised Statutes 358-E:1
- Distributorship: means a contract or agreement, either express or implied, whether oral or written, by which the grantor, in exchange for the payment of a distributorship fee:
(a) Grants the distributor the right to:
(1) Offer, sell or distribute goods manufactured or supplied by the grantor through vending machines, racks, display cases, or other similar devices; or
(2) Purchase from the grantor or an affiliate of the grantor an inventory of products for sale or distribution in or on such vending machines, racks, display cases, or other similar devices; or
(3) Purchase or lease from the grantor or an affiliate of the grantor vending machines, racks, display cases, or other similar devices to be used for the sale or distribution of merchandise; and
(b) Represents that it will provide locations or assist the distributor in finding locations for the use or operation of such vending machines, racks, display cases, or other similar devices on property owned, leased or controlled by a third party. See New Hampshire Revised Statutes 358-E:1 - 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
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- following: when used by way of reference to any section of these laws, shall mean the section next preceding or following that in which such reference is made, unless some other is expressly designated. See New Hampshire Revised Statutes 21:13
- Fraud: Intentional deception resulting in injury to another.
- Grantor: The person who establishes a trust and places property into it.
- Grantor: is a person who grants a distributorship or any agent or representative thereof. See New Hampshire Revised Statutes 358-E:1
- 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
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Person: means any person defined by N. See New Hampshire Revised Statutes 358-E:1
- 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 extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall include said district and territories. See New Hampshire Revised Statutes 21:4
- United States: shall include said district and territories. See New Hampshire Revised Statutes 21:4
(b) The official name and address and principal place of business of the grantor and the parent firm or holding company of the grantor, if any;
(c) The business experience stated individually of each of the grantor’s directors and officers including the biographical data concerning all such persons;
(d) The business experience of the grantor, including the length of time the grantor has conducted a business of the type to be operated by the distributor, has granted distributorships for such business, and has granted distributorships in other lines of business;
(e) Where such is the case, a statement that the grantor or any of its current directors or officers:
(1) Has been held liable in a civil action by final judgment, convicted of a felony or pled nolo contendere to a felony charge if such felony or civil action involved fraud, embezzlement, fraudulent conversion or misappropriation of property for the most recent 7 year period;
(2) Is subject to any currently effective state or federal agency injunctive or restrictive order relating to or affecting distributorship activities or the grantor/distributor relationship;
(3) Has filed in bankruptcy or has been associated as a director or officer of any company that has filed bankruptcy or reorganization proceedings for the most recent 7 year period;
(4) Has been a party to any cause of action brought by distributors against the grantor for the most recent 7 year period which resulted either in an out-of-court settlement or a judgment against the grantor; and
(5) Is presently a party to any cause of action brought by a distributor against the grantor;
such statement shall set forth the identity and location of the court, date of conviction or judgment, and penalty imposed or damages assessed, and the date, nature, and issuer of each such order or ruling;
(f) A copy of any contracts, agreements, brochures or other documents relating to the distributorship;
(g) A factual description of the distributorship offered to be sold and of the services, training and assistance which will be provided by the grantor to the distributor;
(h) A statement describing the total funds which must be paid by the distributor to the grantor in order to obtain or commence the distributorship operation, such as deposits, down payments and fees; and, if all or part of these fees or deposits are returnable under certain conditions, these conditions should be set forth; and, if not returnable, such fact shall be disclosed;
(i) A statement describing the recurring fees required to be paid, in connection with carrying on the distributorship business, by the distributor to the grantor;
(j) If the grantor proposes to use estimated or projected distributorship sales or earnings, a statement of such estimates or projections together with an explanation of the bases and assumptions underlying such estimates or projections and any supportive data;
(k) A statement disclosing:
(1) The number of distributorships operating at the end of the last calendar year; and
(2) The names and addresses of all distributorships located in this state;
(l) A statement describing any services, supplies, products, signs, fixtures, or equipment relating to the establishment or the operating of the distributorship which the distributor is required to purchase, lease or rent directly or indirectly from the grantor;
(m) A statement of whether the grantor will receive any income or other consideration from suppliers of goods or services required or suggested to be purchased by the distributor;
(n) A statement of the terms and conditions of any financing arrangement offered directly or indirectly by the grantor; and a statement of whether the grantor will receive any payments from any person for the placement of financing with such person;
(o) A statement whether, by the terms of the distributorship agreement or other device or practice, the distributor is limited in the goods or services he may offer for sale, or limited in the customers to whom he may sell such goods or services or is promised an exclusive or protected territory in which he may sell such goods or services;
(p) A statement disclosing the conditions and terms under which the grantor allows the distributor to sell, lease, assign, or otherwise transfer his distributorship, or any interest therein and the amount of consideration which must be paid to the grantor for such sale, lease, assignment or transfer, if any;
(q) A statement disclosing:
(1) The conditions under which the distributorship agreement may be terminated by the grantor, renewal may be refused, or the distributorship may be repurchased by the grantor at its option;
(2) The number, stated for each category, of distributorships which were terminated, renewal refused or repurchased during the preceding calendar year and a complete explanation thereof; and
(3) The conditions under which the distributorship agreement may be terminated by the distributor and the number of distributorships voluntarily terminated by distributors during the preceding calendar year;
(r) The disclosure statement required by N.H. Rev. Stat. § 358-E:4, if in different form than the application; and
(s) Any other information required by rule adopted by the attorney general, pursuant to RSA 541-A.
II. The grantor shall file with the attorney general a financial statement of the grantor, audited by an independent certified public accountant, as of the close of the most recent fiscal year of the grantor. If any material changes in the financial condition of the grantor occur after such statement is prepared, the grantor must disclose such changes and explain their significance to the operation of a distributorship. The attorney general may, in his discretion, waive the requirement for audited statements for grantors who have not previously had such certified audits, provided the unaudited financial statement is prepared by an independent certified public accountant. If the grantor is controlled by any person who absolutely and unconditionally guarantees to assume the duties and obligations of the grantor under the distributorship agreement should the grantor become unable to perform, the attorney general may, in his discretion, accept a consolidated financial statement from the grantor and such person. If the attorney general finds that a grantor has failed to demonstrate that adequate financial arrangements have been made to fulfill the obligations set forth in the distributorship agreement, the attorney general may require the escrow or impoundment of fees and other funds paid by the distributor or distributors until such obligations have been fulfilled, or, at the option of the grantor, the furnishing of a surety bond as provided by rule or order of the attorney general, if he finds that such requirement is necessary and appropriate to protect distributors.
III. Upon satisfactory submission of the information and documents required by paragraphs I and II and the payment of a registration fee of $50, the attorney general shall issue a certificate stating that the distributorship has been registered.
IV. The attorney general may accept any registration filed with agencies of the United States or any other state, in lieu of the filing required by this chapter, if he determines the acceptance of such registration will adequately protect the public.
V. The attorney general may from time to time by order exempt from the provisions of this chapter any distributorship if he finds that the enforcement of all the provisions of this chapter with respect to such distributorship is not necessary in the public interest and for the protection of distributors due to the limited character of the distributorship, or the small amount of money involved or because such distributorship is, in the judgment of the attorney general, otherwise adequately regulated by federal or state law or because such distributorship has been registered and approved pursuant to the laws of the United States or any other state.
VI. The grantor shall immediately notify the attorney general of any material change in information contained in the application for registration and shall make appropriate amendment of the disclosure statement.
VII. [Repealed.]