Georgia § 10-1-412 - When bond or trust account required; escrow account required.

§ 10-1-412. When bond or trust account required; escrow account required.

Any business opportunity seller or company which represents, in conjunction with any agreement which requires a total initial payment of an amount exceeding $500.00, that the seller or company will refund all or part of the price paid for the business opportunity or will repurchase any of the products, equipment, supplies, or chattels supplied by the seller or company if the purchaser is dissatisfied with the business opportunity and any multilevel distribution company must either have obtained a surety bond issued by a surety company authorized to do business in this state or have established a trust account with a licensed and insured bank or savings institution located in this state. For purposes of this subsection, deposits shall not be considered part of the price paid for the business opportunity. The amount of the bond or trust account shall be an amount not less than $75,000.00. The bond or trust account shall be in favor of the state for the benefit of any person who is damaged by any violation of this part or by the seller's or company's breach of the contract or agreement or of any obligation arising therefrom. Such person may bring an action against the bond or trust account to recover damages suffered; provided, however, that the aggregate liability of the surety or trustee shall be only for actual damages and in no event shall exceed the amount of the bond or trust account. A multilevel distribution company which requires an initial payment of less than $500.00 from each participant shall be exempt from the requirements of this Code section. In any sale of a business opportunity, the seller shall collect no more than 15 percent of the total purchase price, with the balance to be placed in an independent escrow account agreed upon by both parties. The balance in the escrow account shall be paid to the seller 60 days after the date the purchaser commences operation of the business or upon complete compliance with the terms of the contract, whichever happens first. (Ga. L. 1980, p. 1233, § 3; Ga. L. 1984, p. 522, § 3; Ga. L. 1988, p. 1868, § 1; Ga. L. 1992, p. 2370, § 2.) Law reviews. - For note, "The Georgia Sale of Business Opportunities Act," see 1 Ga. St. U.L. Rev. 219 (1985).