Indiana § 24-5-8-1 - Definitions

§ 24-5-8-1. Definitions

Sec. 1. As used in this chapter:

"Business opportunity" means an investment that:

(1) involves the sale or lease or offer to sell or lease any goods or services to an investor that are to be used by the investor in beginning or operating a business;

(2) involves an initial payment by the investor of more than five hundred dollars ($500) and an initial cash payment of less than fifty thousand dollars ($50,000); and

(3) involves a solicitation of investors in which the seller represents that:

(A) the investor may or will earn an amount in excess of the initial payment as a result of the investment;

(B) a market exists for any goods to be made or services to be rendered by the investor;

(C) the seller may buy from the investor any goods to be made or services to be rendered by the investor;

(D) the seller or a person referred by the seller to the investor may or will sell, lease, or distribute the goods made or services rendered by the investor; or

(E) the seller may or will pay to the investor the difference between the initial payment and the investor's earnings from the investment.

"Business opportunity" does not include an investment that involves:

(1) the sale of a franchise as defined by IC 23-2-2.5-1 or IC 23-2-2.7-5;

(2) the sale of any assets (other than inventory) of an ongoing business by the owner of the business;

(3) the not-for-profit sale of sales demonstration equipment, materials, or samples for a total price of five hundred dollars ($500) or less; or

(4) the sale of all or substantially all of the assets of an ongoing business.

"Contract" means any agreement relating to a business opportunity.

"Goods" means any merchandise, equipment, product, supply, or material.

"Initial cash payment" means that portion of the initial payment that the investor is obligated to pay to the seller before or at the time of delivery of goods or services. The term does not include any amount financed by the seller, any amount for which financing is to be obtained by the seller, any amount that the seller assists in financing, or any amount required by the seller to be deposited as security for the performance by an investor of the operation of the business or that secures an extension of credit.

"Initial payment" means the total amount an investor is obligated to pay under the terms of the contract before or at the time of delivery of the goods or services to the investor or within six (6) months of the date that the investor commences operation of the business. If the contract states a total price for the business opportunity and provides that the total price is to be paid partially as an initial cash payment and the remainder in specific monthly payments, the term means the total price. The term does not include any amount required by the seller to be deposited as security for the performance by an investor of the operation of the business or that secures an extension of credit.

"Investor" means a person who is solicited to become obligated or does become obligated on a contract.

"Offer" includes every attempt to dispose of a business opportunity or an interest in a business opportunity for value.

"Person" means a human being, corporation, limited liability company, partnership, unincorporated association, trust, or governmental entity.

"Sale" includes every contract to sell or dispose of a business opportunity or an interest in a business opportunity for value.

"Seller" means a person, or his agent, who sells or leases or offers to sell or lease a business opportunity.

"Service" means any assistance, guidance, direction, work, labor, or such other act as may be provided by the seller in the initiation or maintenance of a business.

"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:

(1) at least five million dollars ($5,000,000); or

(2) at least one million dollars ($1,000,000) if the seller is at least eighty percent (80%) owned by a corporation that has a net worth on a consolidated basis, according to current financial statements certified by an independent certified public accountant, of at least five million dollars ($5,000,000).

As added by P.L.134-1984, SEC.1. Amended by P.L.239-1985, SEC.2; P.L.12-1986, SEC.10; P.L.252-1987, SEC.1; P.L.8-1993, SEC.361.