CHAPTER 672c*
BUSINESS OPPORTUNITY INVESTMENT ACT

      *Connecticut Business Opportunity Investment Act, Sec. 36b-60 et seq. cited. 236 C. 602. Cited. Id.

Table of Contents

Sec. 36b-60. (Formerly Sec. 36-503). Short title: Connecticut Business Opportunity Investment Act.
Sec. 36b-61. (Formerly Sec. 36-504). Definitions.
Sec. 36b-62. (Formerly Sec. 36-505). Registration of business opportunities. Consent to service of process.
Sec. 36b-63. (Formerly Sec. 36-506). Disclosure to purchaser-investor required.
Sec. 36b-64. (Formerly Sec. 36-507). Surety bond or trust account.
Sec. 36b-65. (Formerly Sec. 36-508). Exemptions.
Sec. 36b-66. (Formerly Sec. 36-509). Contract to be in writing. Information required.
Sec. 36b-67. (Formerly Sec. 36-510). Prohibited sales activities.
Sec. 36b-68. (Formerly Sec. 36-511). Stop orders. Summary postponement or suspension of effectiveness of registration. Procedure. Abandonment of application for registration.
Sec. 36b-69. (Formerly Sec. 36-512). Registration does not imply approval.
Sec. 36b-70. (Formerly Sec. 36-513). Banking Commissioner to administer.
Sec. 36b-71. (Formerly Sec. 36-514). Investigations. Powers of commissioner.
Sec. 36b-72. (Formerly Sec. 36-515). Violations. Enforcement powers of commissioner. Remedies.
Sec. 36b-73. (Formerly Sec. 36-516). Penalties.
Sec. 36b-74. (Formerly Sec. 36-517). Contracts voidable, when. Purchaser-investor's remedies.
Sec. 36b-75. (Formerly Sec. 36-517a). Application of certain provisions of chapter. When offer to sell or buy made in this state.
Sec. 36b-76. (Formerly Sec. 36-518). Appeals.
Sec. 36b-77. (Formerly Sec. 36-519). Commissioner to adopt regulations.
Sec. 36b-78. (Formerly Sec. 36-520). Commissioner to keep register of applications.
Sec. 36b-79. (Formerly Sec. 36-521). Renewal of registration. Amended disclosure document.
Sec. 36b-80. False or misleading statements prohibited.

      Sec. 36b-60. (Formerly Sec. 36-503). Short title: Connecticut Business Opportunity Investment Act. Sections 36b-60 to 36b-80, inclusive, may be cited as the "Connecticut Business Opportunity Investment Act".

      (P.A. 79-458, S. 1, 19; P.A. 97-22, S. 6.)

      History: Sec. 36-503 transferred to Sec. 36b-60 in 1995; P.A. 97-22 made a technical change.

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      Sec. 36b-61. (Formerly Sec. 36-504). Definitions. When used in sections 36b-60 to 36b-80, inclusive, unless the context otherwise requires:

      (1) "Affiliate" means a person that: (A) Directly or indirectly controls, is controlled by, or is under common control with, a seller; (B) directly or indirectly owns, controls or holds with power to vote ten per cent or more of the outstanding voting securities of a seller; or (C) has, in common with a seller, one or more partners, officers, directors, trustees, branch managers or other persons occupying similar status or performing similar functions;

      (2) "Business opportunity" means the sale or lease, or offer for sale or lease, of any product, equipment, supply or service which is sold or offered for sale to the purchaser-investor for the purpose of enabling the purchaser-investor to start a business, and in which the seller represents that: (A) The seller will provide locations or assist the purchaser-investor in finding locations for the use or operation of vending machines, racks, display cases or other similar devices, or currency-operated amusement machines or devices, or any other devices within the intent of sections 36b-60 to 36b-80, inclusive, as the commissioner shall by regulation or order determine, on premises neither owned nor leased by the purchaser-investor or seller; or (B) the seller will purchase any or all products made, produced, fabricated, grown, bred or modified by the purchaser-investor using, in whole or in part, the supplies, services or chattels sold to the purchaser-investor; or (C) the seller guarantees, either conditionally or unconditionally, that the purchaser-investor will derive income from the business opportunity, or that the seller will refund all or part of the price paid for the business opportunity or repurchase any of the products, equipment, supplies or chattels supplied by the seller, if the purchaser-investor is unsatisfied with the business opportunity; or (D) the seller will provide a sales program or marketing program to the purchaser-investor, provided sections 36b-60 to 36b-80, inclusive, shall not apply to the sale of a marketing program made in conjunction with the licensing of a registered trademark or service mark, provided (i) such trademark or service mark has been effectively registered under federal law; and (ii) for such trademark or service mark initially registered under federal law on or after October 1, 1996, the seller files with the commissioner a copy of the trademark or service mark certificate prior to any offer or sale in the state, provided further that failure to file such certificate shall not, in and of itself, preclude reliance on this exclusion. "Business opportunity" does not include the sale of an ongoing business where the owner of that business sells and intends to sell only that one business opportunity, nor does it include the not-for-profit sale of sales demonstration equipment, materials or samples, for a total price of five hundred dollars or less to any one person;

      (3) "Commissioner" means the Banking Commissioner or any person appointed or designated by the Banking Commissioner to administer said sections;

      (4) "Not-for-profit sale" means a sale in which the seller recovers only the actual costs of producing and shipping the goods or materials sold. A sale shall not qualify as a not-for-profit sale if the price to the purchaser-investor includes any commissions, rebates, fees or overrides;

      (5) "Person" means an individual, corporation, limited liability company, trust, partnership, incorporated or unincorporated association or any other legal entity;

      (6) "Purchaser-investor" means a person who has purchased or is solicited for the purchase of a business opportunity;

      (7) (A) "Sale" or "sell" includes every contract of sale of, contract to sell, or disposition of a business opportunity or interest in a business opportunity for value; (B) "offer" or "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to buy, a business opportunity or interest in a business opportunity for value. Nothing in this subdivision shall limit or diminish the full meaning of the terms "sale", "sell", "offer" or "offer to sell" as construed by the courts of this state;

      (8) "Seller" means a person who sells or offers to sell a business opportunity or any agent or person who, directly or indirectly, acts on behalf of such person; and

      (9) "Trademark" or "service mark" includes a trademark, trade name, service mark, logotype, advertising or other commercial symbol.

      (P.A. 79-458, S. 2, 19; P.A. 80-262, S. 1, 10; 80-483, S. 108, 186; P.A. 83-217, S. 1, 2, 7; 83-587, S. 79, 96; P.A. 87-9, S. 2, 3; P.A. 95-79, S. 137, 189; P.A. 96-73, S. 1; P.A. 97-22, S. 7; P.A. 03-84, S. 28; P.A. 09-160, S. 1.)

      History: P.A. 80-262 added proviso in Subdiv. (6)(D) re registration of trademark or service mark under federal law and defined such marks in new Subdiv. (8); P.A. 80-483 made technical grammatical correction in Subdiv. (5); P.A. 83-217 amended Subdiv. (5) to define terms "sale" or "sell" and "offer" or "offer to sell" and amended Subdiv. (6) to broaden the types of representations on the part of a seller which would make the seller subject to the provisions of the act; P.A. 83-587 made a technical change in Subdiv. (5); (Revisor's note: Pursuant to P.A. 87-9 "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"); Sec. 36-504 transferred to Sec. 36b-61 in 1995; P.A. 95-79 redefined "person" to include a limited liability company, effective May 31, 1995; P.A. 96-73 amended Subdiv. (6), defining "business opportunity", to require those who register trademarks or servicemarks under federal law to file the mark with the commissioner prior to any offer or sale in this state; P.A. 97-22 made technical changes; P.A. 03-84 changed "Commissioner of Banking" to "Banking Commissioner" in Subdiv. (1), effective June 3, 2003; P.A. 09-160 defined "affiliate" in new Subdiv. (1), repositioned definitions of "business opportunity", "not-for-profit sale" and "sale" or "sell" from former Subdivs. (5) to (7) to new Subdivs. (2), (4) and (7), redesignated existing Subdivs. (1) to (4) and (8) as Subdivs. (3), (5), (6), (8) and (9), redefined "trademark" in redesignated Subdiv. (9) and made technical changes.

      Subdiv. (4):

      Cited. 236 C. 602.


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      Sec. 36b-62. (Formerly Sec. 36-505). Registration of business opportunities. Consent to service of process. (a) No person shall sell or offer a business opportunity in this state unless such business opportunity is registered under this section or is exempt from registration under section 36b-65.

      (b) Prior to the sale or offer for sale of a business opportunity the seller shall register the business opportunity with the commissioner by filing with the commissioner:

      (1) A copy of the disclosure document required by section 36b-63;

      (2) A bond as required by section 36b-64;

      (3) In accordance with subsection (e) of this section, an irrevocable consent appointing the commissioner to be such seller's attorney to receive service of any lawful process in any noncriminal suit, action or proceeding which arises under sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under the provisions of said sections;

      (4) Information and documents in such form as the commissioner may prescribe, including, but not limited to:

      (A) The official name, address and principal place of business of the seller and of the parent firm or holding company of such seller, if any;

      (B) The biographical data and business experience of each of the seller's directors and officers;

      (C) The business experience of the seller, including the length of time such seller has: (i) Conducted a business of the type to be operated by the purchaser-investor, (ii) sold any business opportunity for such business, and (iii) sold any business opportunity in any other line of business;

      (D) A copy of any contracts, agreements, brochures or other documents relating to the business opportunity;

      (E) A factual description of the business opportunity offered to be sold and of the services, training and assistance that will be provided by the seller to the purchaser-investor;

      (F) A statement describing any services, supplies, products, signs, fixtures or equipment relating to the establishment or the operation of the business opportunity that the purchaser-investor is required to purchase, lease or rent directly or indirectly from the seller;

      (G) A copy of the table of contents of any operations manual to be provided to the purchaser-investor;

      (H) (i) A balance sheet, income statement and statement of changes in financial condition of the seller as of a date not more than four months prior to the filing under this subsection, which financial statements may be unaudited, provided, if the seller has been in business for less than twelve months from the date of such filing, such financial statements shall be reviewed by an independent certified public accountant and shall include a written opinion from such accountant stating that the accountant is not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles; (ii) a balance sheet of the seller, an income statement and statement of changes in financial position for the most recent fiscal year audited by an independent public accountant or an independent certified public accountant; (iii) a balance sheet of the seller, an income statement and statement of changes in financial position for the prior two fiscal years reviewed by an independent certified public accountant who provides an opinion stating that such accountant is not aware of any material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles; and (iv) any material changes in the financial condition of the seller occur after such financial statements are prepared, the seller shall disclose such changes and explain their significance to the operation of the business opportunity. If the seller is controlled by any person who absolutely and unconditionally guarantees to assume the duties and obligations of the seller under the business opportunity agreement should the seller become unable to perform, the commissioner may accept consolidated financial statements from the seller and such person;

      (I) Any other information that the commissioner in the commissioner's discretion reasonably requires;

      (J) A written statement signed and sworn to by the seller before a person qualified to administer oaths that the information contained in the documents filed pursuant to this subsection is true and correct; and

      (K) A nonrefundable registration fee of four hundred dollars.

      (c) (1) The registration of a business opportunity shall become effective on order of the commissioner and may be renewed in accordance with section 36b-79.

      (2) If the commissioner finds that a seller has failed to demonstrate that adequate financial arrangements have been made to fulfill the obligations set forth in the business opportunity agreement, the commissioner may require the escrow or impoundment of fees and other funds paid by the purchaser-investor or purchaser-investors until such obligations have been fulfilled, or, at the option of the seller, the furnishing of a surety bond as provided by regulation, adopted pursuant to section 36b-77, or order of the commissioner, if the commissioner finds that such requirement is necessary and appropriate to protect purchaser-investors.

      (d) The seller shall immediately notify the commissioner of any material change in the information and documents required to be filed under this section, and make appropriate amendments to the disclosure document.

      (e) Every seller proposing to sell or offer for sale a business opportunity in this state or from this state directly or through any person acting on an agency basis, as determined by reference to the principles of common law, shall file with the commissioner, in such form as the commissioner by regulation, adopted pursuant to section 36b-77, or order prescribes, an irrevocable consent appointing the commissioner to be the seller's attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against the seller or the seller's successor, executor or administrator that arises under sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under said sections after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. Service may be made by leaving a copy of the process in the office of the commissioner, but such service shall not be effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to the defendant or respondent at the defendant's or respondent's last address on file with the commissioner, and (2) the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

      (f) When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under said sections, and such person has not filed a consent to service of process under subsection (e) of this section and personal jurisdiction over such person cannot otherwise be obtained in this state, such conduct shall be considered equivalent to such person's appointment of the commissioner to be such person's attorney to receive service of any lawful process in any noncriminal suit, action or proceeding against such person or such person's successor, executor or administrator that grows out of such conduct and that is brought under said sections or any regulation or order adopted or issued under said sections, with the same force and validity as if served on such person personally. Service may be made by leaving a copy of the process in the office of the commissioner, but such service shall not be effective unless (1) the plaintiff, who may be the commissioner in a suit, action or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to the defendant or respondent at the defendant's or respondent's last known address, and (2) the plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

      (g) When any business opportunity has been sold or offered for sale without compliance with the registration provisions of this section, the seller thereof may apply for the postsale registration of such business opportunity, on forms designated by the commissioner, by filing the following with the commissioner:

      (1) The documents, information and registration fee required by subsection (b) of this section; and

      (2) A single document, signed and sworn to by an executive officer of the seller, which contains an explanatory statement and a statement of nonprejudice. The explanatory statement shall include the following information: (A) A statement that business opportunities were sold or offered for sale without compliance with the registration provisions of sections 36b-60 to 36b-80, inclusive; (B) a statement that, to induce each purchaser-investor to whom a business opportunity has been sold in violation of sections 36b-60 to 36b-80, inclusive, to sign the statement of nonprejudice, the document is being prepared for presentation to that purchaser-investor; (C) a full and complete statement of the remedies provided to the purchaser-investor under section 36b-74; (D) a statement containing any other material facts relating to the sale or offer for sale of the unregistered business opportunity; and (E) the most recent balance sheet and income statement of the seller. The statement of nonprejudice shall provide that: (i) The purchaser-investor to whom a business opportunity was sold without compliance with the registration provisions of sections 36b-60 to 36b-80, inclusive, has read the explanatory statement; (ii) the purchaser-investor to whom a business opportunity was sold without compliance with the registration provisions of sections 36b-60 to 36b-80, inclusive, is satisfied that he or she will not be defrauded, damaged or prejudiced by the postsale registration of the business opportunity; and (iii) each purchaser-investor to whom a business opportunity has been sold without compliance with the registration provisions of sections 36b-60 to 36b-80, inclusive, has not waived any of his or her rights under said sections by signing the statement.

      (h) The seller shall mail the document containing both the explanatory statement and the statement of nonprejudice to each purchaser-investor to whom an unregistered business opportunity has been sold after such document has been reviewed by the commissioner. The commissioner may object to the content of the document but shall in no way pass upon its truthfulness. Following review by the commissioner, the seller shall send the document by certified mail, return receipt requested, to each such purchaser-investor and shall submit copies of all return receipts to the commissioner. The seller shall certify that each such purchaser-investor has signed the document and shall return the signed documents to the commissioner. The seller shall also furnish the commissioner with a list of the names, addresses and telephone numbers of those purchaser-investors to whom business opportunities have been sold without compliance with the registration provisions of sections 36b-60 to 36b-80, inclusive, and the amount paid by each purchaser-investor for the business opportunity.

      (i) If it appears to the commissioner that no person has been defrauded, prejudiced or damaged by such noncompliance or sale and that no persons will be defrauded, prejudiced or damaged by such postsale registration, the commissioner may permit the business opportunity to be registered upon the payment of fifty dollars plus the fee prescribed by subsection (b) of this section. Registration under the provisions of this subsection shall not affect the prosecution of a violation of any provision of sections 36b-60 to 36b-80, inclusive.

      (P.A. 79-458, S. 3, 19; P.A. 82-52, S. 1; P.A. 83-217, S. 3, 7; P.A. 92-89, S. 13, 20; P.A. 97-22, S. 8; P.A. 01-48, S. 7; P.A. 09-160, S. 2; 09-209, S. 38.)

      History: P.A. 82-52 added Subsec. (e) containing provisions for postsale registration; P.A. 83-217 amended Subsec. (e) to establish specific requirements for postsale registration of a business opportunity; P.A. 92-89 increased the registration fee in Subsec. (a) from $200 to $400; Sec. 36-505 transferred to Sec. 36b-62 in 1995; P.A. 97-22 made technical changes; P.A. 01-48 made technical changes for purposes of gender neutrality in Subsecs. (a) to (c) and amended Subsecs. (b) and (c) by adding references to return receipt requested and express delivery; P.A. 09-160 substantially revised section by adding new Subsec. (a) requiring persons offering a business opportunity to be registered unless exempt, redesignating existing Subsec. (a) as Subsec. (b), deleting former Subsec. (a)(3), redesignating existing Subsec. (a)(4) as Subsec. (b)(3), deleting former Subsecs. (a)(5) to (e)(4), adding new Subsec. (b)(4) re registration information, adding new Subsecs. (c) to (i) re business opportunity registration, financial arrangements, consent to service of process and postsale registration, and making technical changes throughout; P.A. 09-209 amended Subsec. (a) by changing "person" to "business opportunity" re registration, amended Subsec. (b)(1) by replacing "disclosure" with "disclosure document" and amended Subsec. (b)(4)(H) by changing "or" to "and" before clause (iv) and making technical changes.

      Subsec. (c):

      Cited. 236 C. 602.


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      Sec. 36b-63. (Formerly Sec. 36-506). Disclosure to purchaser-investor required. (a) At least ten business days prior to the time the purchaser-investor signs a business opportunity contract, or at least ten business days prior to the receipt of any money or thing of value by the seller or any person designated by the seller to receive such money or thing of value, whichever occurs first, the seller shall provide the prospective purchaser-investor a written disclosure document described in subsection (c) of this section, the cover sheet of which shall be entitled in at least ten-point boldface capital letters "DISCLOSURES REQUIRED BY CONNECTICUT LAW". Under this title shall appear the statement in at least ten-point type that "The State of Connecticut does not approve, recommend, endorse or sponsor any business opportunity. The information contained in this disclosure has not been verified by the state. If you have any questions about this investment, see an attorney before you sign a contract or agreement." Nothing except the title, the required statement, the name of the seller and the date of the disclosure document shall appear on the cover sheet.

      (b) (1) The disclosure document required by subsection (a) of this section may consist of: (A) The Uniform Franchise Offering Circular with associated guidelines adopted by the North American Securities Administrators Association, Inc., as amended from time to time, or (B) a disclosure document in accordance with the provisions of the Federal Trade Commission's trade regulation rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures", 16 CFR 436, as amended from time to time, with the cover sheet required by subsection (a) of this section placed immediately after the cover sheet required under such rule of the Federal Trade Commission.

      (2) Any additional information required by subsection (c) of this section, which is not contained in the document filed under subdivision (1) of this subsection, shall be included in an addendum to the disclosure document and the seller shall file a cross-reference sheet indicating the location of the disclosures required by subsection (c) of this section.

      (c) Except as provided in subsection (d) of this section, the disclosure document shall contain at least the following information which shall be presented in a single document in the order set forth in this subsection and shall include a comment which either positively or negatively responds to each disclosure item required to be in the disclosure document by use of a statement which fully incorporates the information required within such document:

      (1) (A) The official name, business address and principal place of business of the seller and of any affiliate or predecessor of the seller; whether such seller is an individual, partnership, limited liability company, limited liability partnership or corporation and, if the seller is an entity, the date and place of organization; (B) the name under which the seller is doing or intends to do business; and (C) trademarks and service marks which identify the product or products, equipment, supplies or services to be offered, sold or distributed by the prospective purchaser-investor, or under which the prospective purchaser-investor will be operating;

      (2) The business experience during the past five years of each of the seller's current directors, executive officers, trustees, general partners, general managers, and any other persons charged with responsibility for the seller's business activities, including but not limited to, the chief operating officer and the financial, marketing, training and service officers. With regard to each such listed person, for the past five years, such person's principal occupations, nature and types of business in which such person was engaged, names of his employers, current business addresses and titles shall be provided;

      (3) The business experience of the seller and the seller's affiliate or predecessor, if any, including the length of time each: (A) Has conducted a business of the type to be operated by the purchaser-investor; (B) has offered for sale or sold a business opportunity for such business; and (C) has offered for sale or sold business opportunities in any other line of business and a description of such other line of business;

      (4) A statement disclosing who, if any, of such persons listed in subdivisions (1) and (2) of this subsection: (A) Has, at any time during the previous ten fiscal years, been convicted of a felony or pleaded nolo contendere to a felony charge if such felony involved fraud, including but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade; (B) has, at any time during the previous ten fiscal years, been held liable in a civil action resulting in a final judgment, has settled out of court any civil action, is a party to any civil action, or is or was a principal, director, executive officer or partner of any other person that was so held liable, settled or is a party to such action where the civil action (i) involved allegations of fraud, including but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property, or restraint of trade, or (ii) which was brought by a present or former purchaser-investor and which involves or involved the business opportunity relationship; (C) is subject to any currently effective state or federal agency or court injunctive or restrictive order, is a party to a proceeding currently pending in which such order is sought, or is or was a principal, director, executive officer or partner of any other person that is subject to such order or is a party to any such currently pending proceeding relating to or affecting business opportunity activities or the seller-purchaser-investor relationship, or involving fraud, including but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade. The statement required by this subdivision shall include the identity and location of the court or agency; the date of conviction, judgment, or decision; the penalty imposed; the damages assessed; the terms of settlement or the terms of the order and the date, nature, and issuer of each such order or ruling. A seller may include a summary opinion of counsel as to any pending litigation but only if counsel's consent to use such opinion is included in the disclosure document;

      (5) A statement disclosing who, if any, of the persons listed in subdivisions (1) and (2) of this subsection at any time during the previous ten fiscal years has: (A) Filed for bankruptcy protection; (B) been adjudged bankrupt; (C) been reorganized due to insolvency; or (D) been a principal, director, executive officer or partner of any other person that has so filed or was so adjudged or reorganized, during or within one year after the period that such person held such position with such other person. The statement required by this subdivision shall include the name and location of the person having so filed or having been so adjudged or reorganized, the date and any other material facts;

      (6) A factual description of the business opportunity offered to be sold by the seller including a full and detailed description of (A) the actual services and equipment that the business opportunity seller undertakes to perform for or supply to the purchaser-investor and (B) the actual services which the purchaser-investor undertakes to perform, including but not limited to, compliance with procedures established by the seller regarding the operation of the business;

      (7) A statement of the total funds which shall be a sum certain and which the seller requires the purchaser-investor to pay to any specifically named person or any other person known to the seller who receives any consideration incident to such transaction, or which the seller, or any person affiliated with the seller collects in whole or in part on behalf of any party in order to obtain or commence the business opportunity operation such as initial fees, deposits, down payments, prepaid rent, and equipment and inventory purchases, provided the seller shall not be required to make such disclosures if the seller merely approves the purchaser-investor's decision to do business with any other person selected by the purchaser-investor. If all or part of these fees or deposits are returnable under certain conditions, the seller shall set forth these conditions, and if not returnable, the seller shall disclose this fact;

      (8) A statement describing any recurring funds in connection with carrying on the business opportunity business the purchaser-investor is required to pay to any person, including, but not limited to, royalty, lease, advertising, training and sign rental fees and equipment or inventory purchases;

      (9) A statement setting forth the name of each person, including the seller and its affiliates, with whom the seller directly or indirectly requires or advises the purchaser-investor to do business;

      (10) A statement describing any real estate, services, supplies, products, inventories, signs, fixtures, or equipment relating to the establishment or the operation of the business opportunity business the seller directly or indirectly requires the purchaser-investor to purchase, lease or rent, and if such purchase, lease or rental shall be made from specific persons including the seller, a list of the names and addresses of each such person. Such list may be set forth in a separate document and delivered to the prospective purchaser-investor with the disclosure document if the existence of such separate document is disclosed in the disclosure document;

      (11) A description of the basis for calculating, and, if such information is readily available, the actual amount of any revenue or other consideration to be received by the seller or persons affiliated with the seller from suppliers to the prospective purchaser-investor in consideration for goods or services which the seller requires or advises the purchaser-investor to obtain from such suppliers;

      (12) (A) A statement of all material terms and conditions of any financing arrangement offered directly or indirectly by the seller or any person affiliated with the seller to the prospective purchaser-investor; and (B) a description of the terms by which any payment is to be received by the seller from (i) any person offering financing to a prospective purchaser-investor; and (ii) any person arranging for financing for a prospective purchaser-investor;

      (13) A statement describing the material facts of whether under the terms of the business opportunity agreement or other device or practice the purchaser-investor is: (A) Limited in the goods or services he may offer for sale; (B) limited in the customers to whom he may sell such goods or services; (C) limited in the geographic area in which he may offer for sale or sell goods or services; or (D) granted territorial protection by the seller, by which, with respect to a territory or area, the seller will not establish another or more than a fixed number of business opportunity or company-owned outlets either operating under or selling, offering, or distributing the same or similar products, equipment, supplies or services currently being offered to purchaser-investors;

      (14) A statement of the extent to which the seller requires or it is necessary that the purchaser-investor, or if the purchaser-investor is an entity any person affiliated with the purchaser-investor, participates personally in the direct operation of the business opportunity;

      (15) With respect to the business opportunity agreement and any related agreements, a statement disclosing: (A) The term or duration of arrangement, if any, of such agreement and whether such term is or may be affected by an agreement, including leases or subleases, other than the one from which such term arises; (B) the conditions under which the purchaser-investor may renew or extend; (C) the conditions under which the seller may refuse to renew or extend; (D) the conditions under which the purchaser-investor may terminate; (E) the conditions under which the seller may terminate; (F) the obligations, including lease or sublease obligations, of the purchaser-investor after termination of the business opportunity by the seller and the obligations of the purchaser-investor, including lease or sublease obligations, after termination of the business opportunity by the purchaser-investor and after the expiration of the business opportunity; (G) the purchaser-investor's interest upon termination of the business opportunity or upon refusal to renew or extend the business opportunity whether by the seller or by the purchaser-investor; (H) the conditions under which the seller may repurchase, whether by right of first refusal or at the option of the seller, and, if the seller has the option to repurchase the business opportunity, whether there will be an independent appraisal of the business opportunity, whether the repurchase price will be determined by a predetermined formula and whether there will be a recognition of good will or other such intangibles in such repurchase price; (I) the conditions under which the purchaser-investor may sell or assign all or any interest in the ownership of the business opportunity or of the assets of the business opportunity and the amount of consideration, if any, which shall be paid to the seller for such sale or assignment; (J) the conditions under which the seller may sell or assign, in whole or in part, its interest under such agreements; (K) the conditions under which the purchaser-investor may modify; (L) the conditions under which the seller may modify; (M) the rights of the purchaser-investor's heirs or personal representative upon the death or incapacity of the purchaser-investor; and (N) the provisions of any covenant not to compete;

      (16) With respect to the seller and as to the particular named business being offered, a statement disclosing: (A) The total number of business opportunities operating within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by sections 36b-60 to 36b-80, inclusive; (B) the total number of company-owned outlets operating within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections; (C) the names, addresses, and telephone numbers of (i) the ten business opportunity outlets of the named business opportunity business nearest the prospective purchaser-investor's intended location, or (ii) all purchaser-investors of the seller, or (iii) all purchaser-investors of the seller in the state in which the prospective purchaser-investor lives or where the proposed business opportunity is to be located, provided there are more than ten such purchaser-investors. If the number of purchaser-investors to be disclosed exceeds fifty, the listing may be made in a separate document and delivered to the prospective purchaser-investor with the disclosure document if the existence of such separate document is disclosed in the disclosure document; (D) the number of business opportunities that, within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, were voluntarily terminated or not renewed by purchaser-investors within or at the conclusion of the term of the business opportunity agreement; (E) the number of business opportunities that, within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, the seller reacquired by purchase during the term of the business opportunity agreement and upon the conclusion of the term of the business opportunity agreement; (F) the number of business opportunities that, within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, were otherwise reacquired by the seller during the term of the business opportunity agreement and upon the conclusion of the term of the business opportunity agreement; (G) the number of business opportunities within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, in which the seller refused renewal of the business opportunity agreement or other agreements relating to the business opportunity; (H) the number of business opportunities that, within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, were cancelled or terminated by the seller during the term of the business opportunity agreement and upon conclusion of the term of the business opportunity agreement; and (I) with respect to the disclosures required by subparagraphs (D), (E), (F), (G) and (H) of this subdivision, the disclosure document shall also include a general categorization of the reasons for such reacquisitions, terminations and refusals to renew and the number falling within each such category, including but not limited to the following categories: Failure to comply with quality control standards, failure to make sufficient sales, and other breaches of contract;

      (17) (A) If the seller promises services to be performed in connection with site selection, a statement disclosing the full nature of those services, (B) for each agreement entered into within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by sections 36b-60 to 36b-80, inclusive, a statement disclosing the range of time that has elapsed between the signing of the business opportunity agreement or other agreement relating to the business opportunity and the site selection, (C) for each agreement entered into within the calendar year immediately preceding, and as of a date thirty days prior to, the filing of information required by said sections, if the seller is to provide operating business opportunity outlets, a statement disclosing the range of time that has elapsed between the signing of each business opportunity agreement or other agreement relating to the business opportunity and the commencement of the purchaser-investor's business, (D) with respect to the disclosures required by subparagraphs (B) and (C) of this subdivision, a seller may provide a distribution chart using meaningful classifications with respect to such ranges of time;

      (18) If the seller offers an initial training program or informs the prospective purchaser-investor that it intends to provide such person with initial training, a statement disclosing: (A) The type and nature of such training; (B) the minimum amount, if any, of training that will be provided to such purchaser-investor; and (C) the amount, if any, such purchaser-investor shall pay for such training or for obtaining such training;

      (19) If the name of a public figure is used in connection with a recommendation to purchase a business opportunity or as a part of the name of the business opportunity operation or if the public figure is stated to be involved with the management of the seller, a statement disclosing: (A) The nature and extent of the public figure's involvement and obligations to the seller, including but not limited to, the promotional assistance the public figure will provide to the seller and to the purchaser-investor; (B) the total investment of the public figure in the business opportunity operation; and (C) the amount of any fee or fees the purchaser-investor will be obligated to pay for such involvement or assistance provided by the public figure;

      (20) If the seller intends to use estimated or projected business opportunity 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. The seller shall clearly and conspicuously disclose the following statement together with the information required by this subdivision in immediate conjunction with such representations and in not less than twelve-point upper and lower case boldface type: "Caution: These figures are only estimates of what we think you may earn. There is no assurance you will do as well. If you rely upon our figures, you must accept the risk of not doing as well";

      (21) If the seller makes any statement concerning sales or earnings or range of sales or earnings that may be made through this business opportunity, the document shall disclose: (A) For the three-year period prior to the date of the disclosure document, the total number of purchaser-investors of business opportunities involving the products, equipment, supplies or services being offered who, to the seller's knowledge, have actually received earnings in the amount or range specified and the length of time it took such purchaser-investors to receive earnings in such amount or range; (B) for the three-year period prior to the date of the disclosure document, the total number of purchaser-investors of business opportunities involving the products, equipment, supplies or services being offered. The seller shall clearly and conspicuously disclose the following statement together with the information required by this subdivision in immediate conjunction with such representations and in not less than twelve-point upper and lower case boldface type: "Caution: Some business opportunities have (sold)(earned) this amount. There is no assurance you will do as well. If you rely upon our figures, you must accept the risk of not doing as well";

      (22) If the business opportunity seller is required to secure a bond or establish a trust deposit pursuant to section 36b-64, the document shall state either:

      (A) "As required by Connecticut law, the seller has secured a bond issued by

....
(Name and address of surety company)

a surety company authorized to do business in this state. Before signing a contract to purchase this business opportunity, you should check with the surety company to determine the bond's current status," or

      (B) "As required by Connecticut law, the seller has established a trust account

....
(Number of account)
with ....
(Name and address of bank or other financial institution)

before signing a contract to purchase this business opportunity, you should check with the bank or other depository institution to determine the current status of the trust account";

      (23) The following statement: "If the seller fails to deliver the products, equipment or supplies or fails to render the services necessary to begin substantial operation of the business within forty-five days of the delivery date stated in your contract, you may notify the seller in writing and demand that the contract be cancelled";

      (24) A financial statement as required by subsection (b) of section 36b-62;

      (25) A table of contents shall be included within the disclosure document and shall immediately follow the cover page or pages of the disclosure document;

      (26) The names of those persons who will represent the seller in offering or selling business opportunities in this state. With respect to each such person, a statement disclosing: (A) Such person's business address and telephone number, present employer, and employment or occupational history for the past ten years, including the names of employers, positions held and starting and termination dates for each such position; and (B) whether such person (i) has, at any time during the previous ten fiscal years, been convicted of a felony or pleaded nolo contendere to a felony charge if such felony involved fraud, including but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade, or (ii) has, at any time during the previous ten fiscal years, been held liable in a civil action resulting in a final judgment or has settled any civil action out of court or is a party to any civil action involving allegations of fraud, including but not limited to a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property, or restraint of trade, or that was brought by a present or former purchaser-investor and that involves or involved the business opportunity relationship, or (iii) is subject to any currently effective injunctive or restrictive order issued by any state or federal court or administrative agency, or is a party to a proceeding currently pending in which such order is sought, relating to or affecting business opportunity activities or the seller-purchaser-investor relationship, or involving fraud, including but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade. Such statement shall disclose the identity and location of the court or administrative agency; the date of conviction, judgment, order or decision; the penalty imposed; any damages assessed and the terms of settlement or the terms of the order;

      (27) A section entitled "risk factors" containing a series of short concise captioned paragraphs summarizing the principal factors which make the business opportunity one of high risk or of a speculative nature. Such factors shall include, but not be limited to: The absence of profitable operations within the previous three years; an erratic financial position of the seller; the particular nature of the business in which the seller is engaged or proposes to engage; any adverse background information regarding executive officers and directors of the seller, including prior business failures, criminal convictions or personal adjudications of bankruptcy; limited experience or lack of experience of the seller's management with respect to the particular business; and the identity and relationship to the seller of any customers, the loss of any one of whom would have a material adverse effect on the seller. Where appropriate, reference shall be made to other sections of the disclosure document where more detailed information has been disclosed.

      (d) The information contained in the disclosure document may be supplemented by more detailed information contained in other documents that shall be made a part of the disclosure document; provided, any such supplementary documents are given to the purchaser-investor at the time the disclosure document is given to the purchaser-investor.

      (P.A. 79-458, S. 4, 19; P.A. 80-262, S. 2, 10; P.A. 82-52, S. 2, 3; P.A. 83-217, S. 4, 7; P.A. 84-67, S. 1-4; P.A. 88-339, S. 1; P.A. 97-22, S. 9; P.A. 09-160, S. 3.)

      History: P.A. 80-262 essentially replaced previous provisions; P.A. 82-52 amended Subsec. (b)(23) to include failure to render services as cause for cancellation of contract and made technical corrections and added Subsec. (c) allowing inclusion of supplemental information in other documents if given to purchaser-investor with the disclosure document; P.A. 83-217 amended Subsec. (a) to change "consideration" to "money or thing of value", amended Subsec. (b)(16) and (17) to change period covered by statement from preceding fiscal year to preceding calendar year and as of a date 30 days prior to filing of statement and added Subsec. (b)(26) requiring information concerning seller's representatives; P.A. 84-67 amended Subsec. (b)(6) to require the disclosure document to describe the actual services to be performed by the purchaser-investor, amended Subsec. (b)(8) to require the statement to reflect recurring funds the purchaser-investor is required to pay to any person rather than just the seller and persons affiliated with the seller, amended Subsec. (b)(26) to require the occupational history of persons who will represent the seller for the past 10 years rather than 2 years and added Subsec. (b)(27) to require a "risk factors" section in the disclosure statement; P.A. 88-339 amended Subsec. (b)(2) to require that certain disclosures be made for a 5-year period and to require the seller to disclose the nature and types of business engaged in by certain persons, amended Subsec. (b)(7) to require the disclosure of the total funds which the seller requires the purchaser-investor to pay to any specifically named person or to a person known to the seller who receives consideration incident to the transaction, and exempted from disclosure any case where the seller merely approves the purchaser-investor's decision to do business with a particular party; Sec. 36-506 transferred to Sec. 36b-63 in 1995; P.A. 97-22 made technical changes in Subsec. (b)(16) and (17); P.A. 09-160 amended Subsec. (a) by deleting provision re cover sheet required by federal rule, added new Subsec. (b) re disclosure document, redesignated existing Subsec. (b) as Subsec. (c) and amended same by adding "limited liability company" and "limited liability partnership" in Subdiv. (1)(A), changing references to number of fiscal years from 7 to 10 in Subdiv. (4)(A) and (B), adding "or is or was a principal, director, executive officer or partner of any other person that was so held liable, settled or is a party to such action where the civil action" in Subdiv. (4)(B), adding "or is or was a principal, director, executive officer or partner of any other person that is subject to such order or is a party to any such currently pending proceeding" in Subdiv. (4)(C), changing references to number of fiscal years from 7 to 10 in Subdiv. (26) and changing "disclosure statement" to "disclosure document", and made conforming and technical changes throughout.

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      Sec. 36b-64. (Formerly Sec. 36-507). Surety bond or trust account. If the business opportunity seller makes any of the representations set forth in subparagraph (C) of subdivision (2) of section 36b-61, the seller shall have obtained a surety bond issued by a surety company authorized to do business in this state or shall have established a trust account with a licensed and insured bank or other depository institution located in Connecticut. The amount of such bond or trust account shall be an amount not less than fifty thousand dollars, but the commissioner may require a greater amount if he believes it necessary for the protection of purchaser-investors. Such bond or trust account shall be in favor of the state of Connecticut. Any person who is damaged by any violation of sections 36b-60 to 36b-80, inclusive, or by the seller's breach of the contract for the business opportunity sale or of any obligation arising under such contract may bring an action against the bond or trust account to recover damages suffered.

      (P.A. 79-458, S. 5, 19; P.A. 80-262, S. 3, 10; P.A. 97-22, S. 10; P.A. 09-160, S. 4.)

      History: P.A. 80-262 authorized commissioner to require bond greater than $50,000 if necessary for protection of purchaser-investors; Sec. 36-507 transferred to Sec. 36b-64 in 1995; P.A. 97-22 made a technical change; P.A. 09-160 changed "savings institution" to "other depository institution" and made a technical change.

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      Sec. 36b-65. (Formerly Sec. 36-508). Exemptions. (a) The following business opportunities are exempt from subsection (a) of section 36b-62; section 36b-63 and section 36b-64; section 36b-66 and subdivision (1) of section 36b-67: (1) (A) Subject to the provisions of subparagraph (B) of this subdivision, any business opportunity for which the initial payment made by the purchaser-investor per business opportunity does not exceed two hundred dollars, if no representations are made that the seller guarantees, either conditionally or unconditionally, that the purchaser-investor will derive income from the business opportunity. For purposes of this subparagraph, "initial payment" means the total amount the purchaser-investor becomes obligated to pay to the seller or to any third party either prior to or at the time of delivery of the products, equipment, supplies or services or within one year of the commencement of operation of the business by the purchaser-investor. If payment is over a period of time, "initial payment" includes the sum of the down payment and the total periodic payments. "Initial payment" does not include periodic payments where the amount or rate of the payment is based on net revenue or gross revenue generated by the business. (B) The commissioner may, by regulation, adopted pursuant to section 36b-77, or order as to any business opportunity or type of business opportunity or transaction exempt under subdivision (1)(A) of this subsection, modify, withdraw, further condition or waive such conditions, in whole or in part, conditionally or unconditionally, on a finding that such regulation or order is necessary and appropriate, in the public interest or for the protection of purchaser-investors; (2) any business opportunity sold in this state exclusively to purchaser-investors each of whom has a net worth of not less than one million dollars exclusive of principal residence, home furnishings, and personal automobiles; and (3) any other business opportunity that the commissioner by regulation, adopted pursuant to section 36b-77, or order may exempt, conditionally or unconditionally, if the commissioner finds that enforcement of all the provisions of sections 36b-60 to 36b-80, inclusive, with respect to such business opportunity is not necessary to protect the public interest, and for the protection of purchaser-investors due to the limited character of the business opportunity, or because such business opportunity is, in the judgment of the commissioner, adequately regulated by federal law. The commissioner may by order deny, suspend or revoke any exemption with respect to a particular offering of one or more business opportunities in accordance with the provisions of section 36b-68. No order under this subsection may operate retroactively. No person may be considered to have violated any order issued under this subsection by reason of any offer or sale effected after the entry of such order if such person sustains the burden of proof that such person did not know, and in the exercise of reasonable care could not have known, of such order.

      (b) In any proceeding under sections 36b-60 to 36b-80, inclusive, the burden of proving an exemption, exclusion or an exception from a definition is upon the person claiming it.

      (P.A. 79-458, S. 6, 19; P.A. 80-262, S. 4, 10; P.A. 82-52, S. 4, 5; P.A. 83-217, S. 5, 7; P.A. 84-67, S. 5, 6; P.A. 88-339, S. 2; P.A. 92-89, S. 14, 20; P.A. 96-73, S. 2; P.A. 97-22, S. 11; P.A. 01-10, S. 7; P.A. 09-160, S. 5.)

      History: P.A. 80-262 required filing of balance sheet, income statement and statement of changes in financial condition as specified rather than single "financial statement" and amended provisions accordingly; P.A. 82-52 amended Subsec. (b) to require filing of a balance sheet as of a date not more than four months prior to the filing of registration statement and to limit waivers of the requirement for audited statements to sellers who have been in business for less than one year and amended Subsec. (d) to allow substitution of the Uniform Franchise Offering Circular in lieu of disclosure document; P.A. 83-217 amended Subsec. (b) to require filing of an income statement and statement of changes in financial condition as of a date not more than four months prior to filing of registration statement, to require filing of a balance sheet, income statement and statement of changes in financial position for the most recent fiscal year instead of the most recent three fiscal years, and a balance sheet, income statement and statement of changes in financial position for two fiscal years prior to most recent fiscal year accompanied by independent certified public accountant's opinion showing conformity with generally accepted accounting principles, and amended Subsec. (e) to specify those business opportunities which are exempt from the provisions of this chapter; P.A. 84-67 amended Subsec. (e) to exempt from registration any business opportunity sold in this state exclusively to purchaser-investors with individual net worth less than $1,000,000 and amended Subsec. (f) to require sellers to amend financial statements not less than quarterly; P.A. 88-339 added Subsec. (a)(7) re the table of contents of any operations manual which is to be provided to the purchaser-investor and required the application to include the seller's sworn statement that the information contained in the application is true; P.A. 92-89 increased the registration fee in Subsec. (c) from $200 to $400; Sec. 36-508 transferred to Sec. 36b-65 in 1995; P.A. 96-73 amended Subsec. (b) to expressly allow unaudited financial statements and to delete the commissioner's discretion to waive audited statements; P.A 97-22 made a technical change in Subsec. (e); P.A. 01-10 made technical changes in Subsec. (e); P.A. 09-160 deleted former Subsecs. (a) to (d) re registration and application, redesignated existing Subsec. (e) as Subsec. (a), amended same by adding references to regulations "adopted pursuant to section 36b-77", deleting provision re burden of proving exemption and making technical changes, deleted former Subsec. (f) re notice and amendment and added new Subsec. (b) re burden of proving an exemption, exclusion or an exception from a definition.

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      Sec. 36b-66. (Formerly Sec. 36-509). Contract to be in writing. Information required. (a) Every business opportunity contract or agreement shall be in writing and a copy shall be given to the purchaser-investor at the time he signs the contract.

      (b) Every contract or agreement for a business opportunity shall include the following: (1) The terms and conditions of payment; (2) a full and detailed description of the acts or services that the business opportunity seller undertakes to perform for the purchaser-investor; (3) the seller's principal business address and the name and address of its agent in Connecticut authorized to receive service of process; and (4) the approximate delivery date of any product or products, equipment, supplies or operational guidelines the business opportunity seller is to deliver to the purchaser-investor and an approximate timetable for performance of services necessary to begin substantial operation of the business.

      (P.A. 79-458, S. 7, 19; P.A. 82-52, S. 7; P.A. 84-67, S. 7.)

      History: P.A. 82-52 amended Subsec. (b) to require inclusion of timetable for performance as part of contract; P.A. 84-67 amended Subsec. (b) to require that approximate delivery date of operational guidelines be included in a contract for a business opportunity; Sec. 36-509 transferred to Sec. 36b-66 in 1995.

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      Sec. 36b-67. (Formerly Sec. 36-510). Prohibited sales activities. No person shall in connection with the sale or offer for sale of a business opportunity: (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62; (2) represent that the business opportunity will provide income or earning potential of any kind unless the seller has documented data to substantiate the claims of income or earnings potential and discloses this data to the prospective purchaser-investor at the time such representations are made; (3) use the trademark, service mark, trade names, logotype, advertising or other commercial symbol of any business which does not either control the ownership interest in the seller or accept responsibility for all representations made by the seller in regard to the business opportunity, unless it is clear from the circumstances that the owner of the commercial symbol has knowledge of and consents to such use and is not involved in the sale of the business opportunity; (4) make or authorize the making of any reference to its compliance with sections 36b-60 to 36b-80, inclusive, in any advertisement or other contact with prospective purchaser-investors; (5) make any claim or representation in advertising or promotional material, or in any oral sales presentation, solicitation or discussion between the seller and a prospective purchaser-investor, which is inconsistent with the information required to be disclosed by sections 36b-60 to 36b-80, inclusive; (6) directly or indirectly (A) employ any device, scheme or artifice to defraud, (B) make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or (C) engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.

      (P.A. 79-458, S. 8, 19; P.A. 83-217, S. 6, 7; P.A. 97-22, S. 12.)

      History: P.A. 83-217 amended section to provide that trademark or commercial symbol of a business which neither controls the ownership interest nor accepts responsibility for the representations of the seller, shall not be used unless it is clear from the circumstances that such business, in addition to not being involved in the sale of the business opportunity, has knowledge of and consents to such use; Sec. 36-510 transferred to Sec. 36b-67 in 1995; P.A. 97-22 made technical changes.

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      Sec. 36b-68. (Formerly Sec. 36-511). Stop orders. Summary postponement or suspension of effectiveness of registration. Procedure. Abandonment of application for registration. (a) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any business opportunity registration if the commissioner finds that: (1) Such order is in the public interest; (2) such order is necessary for the protection of purchaser-investors or prospective purchaser-investors; (3) the registration of the business opportunity is incomplete in any material respect but is not abandoned pursuant to subsection (e) of this section or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact; (4) any provision of sections 36b-60 to 36b-80, inclusive, or any regulation, order or condition lawfully adopted, issued or imposed under said sections has been wilfully violated by any person; (5) the seller, or any partner, officer or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the seller or charged with responsibility for the seller's business activities (A) has, at any time during the previous ten fiscal years, been convicted of a felony or pleaded nolo contendere to a felony charge or a misdemeanor if such misdemeanor involved fraud, including, but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade, provided any denial, suspension or revocation hereunder shall be in accordance with the provisions of section 46a-80; (B) is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving business opportunity or securities activities, the seller-purchaser-investor relationship or fraudulent conduct, including, but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade; (C) is the subject of a cease and desist order, consent order or order imposing fines entered by the commissioner within the past ten years and involving a violation of this chapter or chapter 672a; or (D) is the subject of any state or federal agency order or any securities or commodities self-regulatory organization sanction entered within the past ten years and involving (i) business opportunity activities or the seller-purchaser-investor relationship, or (ii) fraud, including, but not limited to, a violation of any business opportunity law, franchise law, securities law or unfair or deceptive practices law, embezzlement, fraudulent conversion, misappropriation of property or restraint of trade; (6) the seller's enterprise or method of business, or that of the business opportunity, includes or would include activities that are illegal where performed; (7) the business opportunity or the offering of the business opportunity has worked or tended to work a fraud upon purchaser-investors or would so operate; or (8) the seller's literature or advertising is misleading, incorrect, incomplete or deceptive.

      (b) The commissioner may by order summarily postpone or suspend the effectiveness of the registration of a business opportunity pending final determination of any proceeding under this section. Upon the entry of such order, said commissioner shall promptly notify the registrant or applicant of the business opportunity that it has been entered and of the reasons for such entry and that within fifteen days after receipt by said commissioner of a written request the matter will be set down for a hearing. If no hearing is requested and none is ordered by the commissioner, such order will remain in effect until modified or vacated by said commissioner. If a hearing is requested, said commissioner may modify or vacate such order or extend it until final determination.

      (c) No stop order may be entered under this section except as provided in subsection (b) of this section without: (1) Appropriate prior notice to the applicant or registrant of a business opportunity; (2) opportunity for a hearing; and (3) the issuance of written findings of fact and conclusions of law by the commissioner, provided, if the commissioner has previously entered a stop order under this section, the commissioner, in the commissioner's discretion, may deny any subsequent application for registration of such business opportunity without such notice, opportunity for a hearing and written findings of fact and conclusions of law, if the commissioner makes the findings in subsection (a) of this section and notifies the seller in writing of such denial.

      (d) The commissioner may vacate or modify a stop order if he finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.

      (e) Notwithstanding the provisions of this section, the commissioner may deem an application for registration of any business opportunity to be abandoned if the applicant fails to respond to any request for information required under sections 36b-60 to 36b-80, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant in writing that if such information is not submitted within sixty days of such written notification, the application shall be deemed abandoned. Any registration fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for registration under this chapter. The hearing requirement in subsection (c) of this section shall not apply to abandonment pursuant to this subsection.

      (P.A. 79-458, S. 9, 19; P.A. 84-67, S. 8; P.A. 97-22, S. 13; P.A. 98-161; P.A. 09-160, S. 6.)

      History: P.A. 84-67 amended Subsec. (a) to delete the requirement that a registration must be incomplete as of its effective date or earlier to allow the commissioner to issue a stop order; Sec. 36-511 transferred to Sec. 36b-68 in 1995; P.A. 97-22 made a technical change in Subsec. (a); P.A. 98-161 added new Subsec. (e) re abandoned registration applications and made conforming change in Subsec. (a); P.A. 09-160 amended Subsec. (a) by adding Subdivs. (5) to (8) re additional grounds for issuance of stop order and making technical changes, and amended Subsec. (c) by adding provision permitting commissioner to deny subsequent application for registration without providing notice, opportunity for hearing and written findings of fact and conclusions of law if certain conditions are met.

      Annotation to former section 36-511:

      Cited. 215 C. 277.


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      Sec. 36b-69. (Formerly Sec. 36-512). Registration does not imply approval. (a) The fact that an application for registration under section 36b-62 has been filed or the fact that a business opportunity is effectively registered shall not constitute a finding by the commissioner that any document filed under sections 36b-60 to 36b-80, inclusive, is true, complete and not misleading. No such fact shall mean that said commissioner has passed in any way upon the merits of, or recommended or given approval to any business opportunity.

      (b) No person shall make or cause to be made any representation inconsistent with subsection (a) of this section to any prospective purchaser-investor.

      (P.A. 79-458, S. 10, 19; P.A. 97-22, S. 14.)

      History: Sec. 36-512 transferred to Sec. 36b-69 in 1995; P.A. 97-22 made a technical change in Subsec. (a).

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      Sec. 36b-70. (Formerly Sec. 36-513). Banking Commissioner to administer. Sections 36b-60 to 36b-80, inclusive, shall be administered by the commissioner.

      (P.A. 79-458, S. 11, 19; P.A. 97-22, S. 15.)

      History: Sec. 36-513 transferred to Sec. 36b-70 in 1995; P.A. 97-22 made a technical change.

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      Sec. 36b-71. (Formerly Sec. 36-514). Investigations. Powers of commissioner. (a) Subject to the provisions of the Freedom of Information Act, as defined in section 1-200, the commissioner may: (1) Make such public or private investigations within or outside of this state as he deems necessary to determine whether any person has violated or is about to violate any provision of sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under said sections, or to aid in the enforcement of said sections or in the adoption of regulations and forms under said sections; (2) require or permit any person to file a statement in writing, under oath or otherwise as said commissioner determines, as to all the facts and circumstances concerning the matter to be investigated; and (3) publish information concerning any violation of sections 36b-60 to 36b-80, inclusive, or of any regulation or order adopted or issued under said sections.

      (b) For the purpose of any investigation or proceeding under sections 36b-60 to 36b-80, inclusive, the commissioner or any officer designated by him may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or records which the commissioner deems relevant or material to the inquiry.

      (c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court for the judicial district of Hartford, upon application by the commissioner, may issue to such person an order requiring him to appear before the commissioner, or the officer designated by him there to produce documentary evidence if so ordered or to give evidence concerning the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.

      (d) No person shall be excused from attending and testifying or from producing any document or record before the commissioner, or in obedience to the subpoena of said commissioner or any officer designated by him, or in any proceeding instituted by said commissioner, on the ground that the testimony or evidence, documentary or otherwise required of him may tend to incriminate him or subject him to a penalty of forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

      (P.A. 79-458, S. 12, 19; P.A. 80-262, S. 5, 10; 80-483, S. 109, 168, 186; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 97-22, S. 16; 97-47, S. 38.)

      History: P.A. 80-262 specified that commissioner's action shall be subject to provisions of chapter 3 rather than "in his discretion"; P.A. 80-483 replaced "Hartford county" with "judicial district of Hartford-New Britain" in Subsec. (c); P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; Sec. 36-514 transferred to Sec. 36b-71 in 1995; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 97-22 made technical changes in Subsecs. (a) and (b); P.A. 97-47 amended Subsec. (a) by substituting "the Freedom of Information Act, as defined in Sec. 1-18a" for "chapter 3".

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      Sec. 36b-72. (Formerly Sec. 36-515). Violations. Enforcement powers of commissioner. Remedies. (a) Whenever it appears to the commissioner, after an investigation, that any person or persons have violated, are violating or are about to violate any of the provisions of sections 36b-60 to 36b-80, inclusive, or any regulation, rule or order adopted or issued under said sections or that a further sale or offer to sell would constitute a violation of said sections, or any such regulation, rule or order, the commissioner may order the person or persons to cease and desist from the violations of the provisions of said sections or any such regulations, rules or orders or from further sale or offering to sell business opportunities constituting or which would constitute a violation of the provisions of said sections or any such regulations, rules or orders. After any such order is issued, the person or persons named in such order may, within fourteen days after receipt of the order, file a written request for a hearing. Such hearing shall be held in accordance with the provisions of chapter 54.

      (b) (1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-60 to 36b-80, inclusive, or any regulation, rule or order adopted or issued under said sections, the commissioner may send a notice to such person by certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or the date seven days after the date on which such notice was mailed or sent. Any such notice shall include: (A) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (B) a short and plain statement of the matter asserted or charged; (C) the maximum fine that may be imposed for such violation; (D) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice; and (E) the time and place for the hearing.

      (2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Such hearing shall be held in accordance with the provisions of chapter 54. After the hearing if the commissioner finds that the person has violated any of the provisions of sections 36b-60 to 36b-80, inclusive, or any regulation, rule or order adopted or issued under said sections, the commissioner may, in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. The commissioner shall send a copy of any order issued pursuant to this subsection by certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to any person named in such order.

      (c) Whenever it appears to the commissioner that any person or persons have violated, are violating or are about to violate any of the provisions of sections 36b-60 to 36b-80, inclusive, or any regulation, rule or order adopted or issued under said sections, or that the further sale or offer to sell would constitute a violation of said sections, or any such regulation, rule or order, the commissioner may in addition to any other remedy authorized by said sections: (1) Bring an action in the superior court for the judicial district of Hartford to enjoin the acts or practices constituting a violation and to enforce compliance with said sections or any such regulation, rule or order. Upon a proper showing, a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The court shall not require the commissioner to post a bond; (2) seek a court order imposing a fine not to exceed one hundred thousand dollars per violation against any person found to have violated any order issued by the commissioner; or (3) in addition to any other remedies provided by this section, apply to the superior court for the judicial district of Hartford for an order of restitution whereby the defendants in such action shall be ordered to make restitution of those sums shown by the commissioner to have been obtained by them in violation of any of the provisions of said sections or any such regulation, rule or order, plus interest at the rate set forth in section 37-3a. Such restitution shall, at the option of the court, be payable to the receiver or conservator appointed pursuant to subdivision (1) of this subsection, or directly to the persons whose assets were obtained in violation of any provision of said sections or any such regulation, rule or order.

      (d) Any time after the issuance of an order or notice provided for in subsection (a) or (b) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing. The acceptance of a consent order shall be within the complete discretion of the commissioner. The consent order provided for in this subsection shall contain (1) an express waiver of the right to seek judicial review or otherwise challenge or contest the validity of such order or notice; (2) a provision that such order or notice may be used in construing the terms of the consent order; (3) a statement that such consent order shall become final when issued; (4) a specific assurance that none of the violations alleged in such order or notice shall occur in the future; (5) such other terms and conditions as are necessary to further the purposes and policies of sections 36b-60 to 36b-80, inclusive; (6) the signature of each of the individual respondents evidencing such respondent's consent; and (7) the signature of the commissioner or of the commissioner's authorized representative.

      (P.A. 79-458, S. 13, 19; P.A. 80-483, S. 110, 169, 186; P.A. 81-48, S. 1, 2; P.A. 87-353; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 97-22, S. 17; P.A. 01-48, S. 5; P.A. 06-75, S. 1; P.A. 09-160, S. 7.)

      History: P.A. 80-483 replaced "Hartford county" with "judicial district of Hartford-New Britain" in Subdiv. (2); P.A. 81-48 amended Subdiv. (4) to permit interest at the rate set forth in Sec. 37-3a to be added to any restitution and to allow restitution to be paid directly to the person whose assets were illegally obtained; P.A. 87-353 restructured the section by dividing it into Subsecs., made technical changes in Subsecs. (a), (c) and (d), added provisions in Subsec. (b)(1) re notice requirements for hearings, and increased the fine the commissioner may impose to $10,000; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; Sec. 36-515 transferred to Sec. 36b-72 in 1995; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 97-22 made technical changes; P.A. 01-48 amended Subsec. (b) by adding references to express delivery, replacing "civil penalty" with "fine" and making technical changes for purposes of gender neutrality; P.A. 06-75 amended Subsec. (a) to require commissioner to conduct investigation before determining violation, to extend commissioner's cease and desist authority to persons who have violated the act or any regulation, rule or order under the act and to make technical changes, amended Subsec. (b)(1) to authorize commissioner to send notice upon finding as result of investigation that any person has violated the act or any such regulation, rule or order, deleting reference to whenever "it appears to" commissioner, amended Subsec. (b)(2) to make a technical change and increase maximum fine from $10,000 per violation to $100,000 per violation, amended Subsec. (c) to extend commissioner's authority to bring action in superior court to persons who have violated the act or any such regulation, rule or order, and to make conforming and technical changes, and amended Subsec. (d) to insert references to "notice", to substitute "respondent named in such order or notice" for "person charged with violating any provision of sections 36b-60 to 36b-80, inclusive,", to eliminate provision re presiding officer designated by commissioner and to make technical changes; P.A. 09-160 amended Subsec. (b)(1) by making technical changes, by adding provision re when notice is deemed received by a person, by repositioning provision requiring time and place for a hearing to be included with notice to Subpara. (E) and by adding new Subpara. (D) requiring statement indicating that a person may file written request for hearing to be included in notice, and amended Subsec. (b)(2) by adding "If a hearing is requested within the time specified in the notice" and by making technical changes.

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      Sec. 36b-73. (Formerly Sec. 36-516). Penalties. (a) Any person who wilfully violates any provision of subdivision (6) of section 36b-67 shall be fined for each violation a maximum of twenty-five thousand dollars or imprisoned for not more than ten years or both.

      (b) Any person who wilfully violates any other provision of sections 36b-60 to 36b-80, inclusive, shall be fined for each violation a maximum of two thousand dollars or imprisoned for not more than two years or both.

      (c) No information may be returned under sections 36b-60 to 36b-80, inclusive, more than five years after the alleged violation.

      (P.A. 79-458, S. 14, 19; P.A. 97-22, S. 18.)

      History: Sec. 36-516 transferred to Sec. 36b-73 in 1995; P.A. 97-22 made technical changes in Subsecs. (b) and (c).

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      Sec. 36b-74. (Formerly Sec. 36-517). Contracts voidable, when. Purchaser-investor's remedies. (a) If a business opportunity seller uses any untrue or misleading statement in the sale of a business opportunity, or fails to give the proper disclosures in the manner required by section 36b-63, or fails to deliver the equipment, supplies or products or render the services necessary to begin substantial operation of the business opportunity within forty-five days of the delivery date stated in the business opportunity contract, or if the contract does not comply with the requirements of section 36b-66, then within two years of the date of the contract, upon written notice to such business opportunity seller, the purchaser-investor may void the contract and shall be entitled to receive from such business opportunity seller all sums paid to such business opportunity seller. Upon receipt of such sums, such purchaser-investor shall make available to such business opportunity seller at such purchaser-investor's address or at the places at which they are located at the time notice is given, all products, equipment or supplies received by such purchaser-investor. Purchaser-investors shall not be entitled to unjust enrichment by exercising the remedies provided in this subsection.

      (b) Any purchaser-investor injured by a violation of sections 36b-60 to 36b-80, inclusive, or by a business opportunity seller's breach of contract subject to said sections or any obligation arising therefrom may bring an action for recovery of damages, including reasonable attorney's fees.

      (c) Upon complaint of any person that a business opportunity seller has violated the provisions of sections 36b-60 to 36b-80, inclusive, the superior court for the judicial district in which either the seller or purchaser-investor is located or the superior court for the judicial district of Hartford shall have jurisdiction to enjoin the defendant or defendants from further violations.

      (d) Any purchaser-investor who is damaged by any violation of sections 36b-60 to 36b-80, inclusive, or by a seller's breach of the contract for the business opportunity sale or of any obligation arising therefrom may bring an action against the bond or trust account provided for in section 36b-64 to recover damages suffered.

      (e) The rights and remedies provided by sections 36b-60 to 36b-80, inclusive, shall be in addition to any other rights or remedies provided by law or equity.

      (f) Every cause of action under sections 36b-60 to 36b-80, inclusive, shall survive the death of any person who might have been a plaintiff or defendant.

      (g) No person may sue under this section more than six years after the contract of sale.

      (h) No person who has made or engaged in the performance of any contract in violation of any provision of sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under said sections, or who has acquired any purported right under such contract with knowledge of the facts by reason of which its making or performance was in violation, may base any cause of action on the contract.

      (i) Any condition, stipulation or provision binding any person acquiring any business opportunity to waive compliance with any provision of sections 36b-60 to 36b-80, inclusive, or any regulation or order adopted or issued under said sections is void.

      (P.A. 79-458, S. 15, 19; P.A. 80-262, S. 6, 10; 80-483, S. 111, 186; P.A. 82-52, S. 8; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 97-22, S. 19; P.A. 99-38, S. 8.)

      History: P.A. 80-262 deleted provisions prohibiting bringing action if purchaser-investor received an offer of refund of consideration paid plus 6% interest less income received on business opportunity either when he owned the business opportunity and failed to accept the offer within 30 days or when he did not own it and rejected the offer within 30 days in Subsec. (g); P.A. 80-483 substituted "judicial district" for "county" in Subsec. (c); P.A. 82-52 allowed purchaser-investor to void contract upon seller's failure to render services; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; Sec. 36-517 transferred to Sec. 36b-74 in 1995; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 97-22 made technical changes; P.A. 99-38 amended Subsec. (a) by changing period during which purchaser-investor may void contract from one year to two years.

      Subsec. (c):

      Cited. 236 C. 602.


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      Sec. 36b-75. (Formerly Sec. 36-517a). Application of certain provisions of chapter. When offer to sell or buy made in this state. (a) Sections 36b-62, 36b-65, 36b-67, 36b-69 and 36b-74 apply to persons who sell or offer to sell a business opportunity when an offer to sell is made or accepted in this state, or when an offer to buy is made and accepted in this state.

      (b) For the purposes of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer originates from this state or is directed by the offeror to this state and received at the place to which it is directed or at any post office in this state in the case of a mailed offer.

      (c) For the purposes of this section, an offer to sell or to buy is accepted in this state when acceptance is communicated to the offeror in this state and has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed or at any post office in this state in the case of a mailed acceptance.

      (d) An offer to sell or to buy is not made in this state when the publisher circulates or there is circulated on his behalf in this state any bona fide newspaper or other publication of general, regular and paid circulation which is not published in this state, or which is published in this state but which has had more than two-thirds of its circulation outside this state during the past twelve months, or a radio or television program originating outside this state is received in this state.

      (P.A. 82-52, S. 6.)

      History: Sec. 36-517a transferred to Sec. 36b-75 in 1995.

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      Sec. 36b-76. (Formerly Sec. 36-518). Appeals. Any person aggrieved by a final decision of the commissioner may appeal to the superior court for the judicial district of New Britain in accordance with the provisions of section 4-183.

      (P.A. 79-458, S. 16, 19; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 99-215, S. 24, 29.)

      History: P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; Sec. 36-518 transferred to Sec. 36b-76 in 1995; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-215 replaced "judicial district of Hartford" with "judicial district of New Britain", effective June 29, 1999.

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      Sec. 36b-77. (Formerly Sec. 36-519). Commissioner to adopt regulations. (a) The commissioner may from time to time adopt, amend and rescind such regulations and forms as are necessary to carry out the provisions of sections 36b-60 to 36b-80, inclusive, including regulations and forms governing registrations, applications and reports, and defining any terms, whether or not used in said sections, insofar as the definitions are not inconsistent with the provisions of said sections. For the purpose of regulations and forms, the commissioner may classify business opportunities within his jurisdiction.

      (b) No regulation or form may be adopted, amended or rescinded unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by policy and provisions of sections 36b-60 to 36b-80, inclusive. In adopting regulations and forms the commissioner may cooperate with agency administrators of the other states and the Federal Trade Commission with a view to effectuating the policy of said sections to achieve maximum uniformity in the form and content of registrations, applications and reports wherever applicable.

      (c) The commissioner may by regulation prescribe: (1) The form and content of financial statements required under sections 36b-60 to 36b-80, inclusive; (2) the circumstances under which consolidated financial statements shall be filed; and (3) whether any required financial statements shall be certified by independent or certified public accountants. All financial statements shall be prepared in accordance with generally accepted accounting practices.

      (d) Any regulations adopted pursuant to the provisions of sections 36b-60 to 36b-80, inclusive, shall be adopted in accordance with the provisions of chapter 54.

      (e) The commissioner, or employees of the Department of Banking authorized by him, may, whether or not requested by any person, issue written advisory interpretations of sections 36b-60 to 36b-80, inclusive, including interpretations of the applicability of any provision of said sections.

      (f) Every hearing in an administrative proceeding shall be public.

      (g) No provision of sections 36b-60 to 36b-80, inclusive, imposing any liability applies to any act done or omitted in good faith in conformity with any regulation, form, order or advisory interpretation of the commissioner, notwithstanding that such regulation, form, order or advisory interpretation may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

      (P.A. 79-458, S. 17, 19; P.A. 80-262, S. 7, 10; 80-482, S. 4, 345, 348; P.A. 87-9, S. 2, 3; P.A. 97-22, S. 20.)

      History: P.A. 80-262 deleted provision in Subsec. (f) which had allowed private hearings at commissioner's discretion upon the request of all respondents; P.A. 80-482 replaced division of banking with banking department and abolished the former division's controlling agency, the department of business regulation; (Revisor's note: Pursuant to P.A. 87-9 "banking department" was changed editorially by the Revisors to "department of banking"); Sec. 36-519 transferred to Sec. 36b-77 in 1995; P.A. 97-22 made technical changes.

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      Sec. 36b-78. (Formerly Sec. 36-520). Commissioner to keep register of applications. (a) A document is filed when it is received by the commissioner.

      (b) The commissioner shall keep a register of all applications for registration which are or have ever been effective under sections 36b-60 to 36b-80, inclusive, and all denial, suspension or revocation orders which have ever been entered under said sections. Such register shall be open for public inspection.

      (c) The information contained in or filed with any registration, application or report may be made available to the public under the provisions of the Freedom of Information Act, as defined in section 1-200.

      (d) Upon request and at such charges as provided for in the Freedom of Information Act, as defined in section 1-200, the commissioner shall furnish to any person photostatic or other copies, certified under his seal of office if requested, of any entry in the register or any document which is a matter of public record. In any proceeding or prosecution under sections 36b-60 to 36b-80, inclusive, any copy so certified shall be prima facie evidence of the contents of the entry or document certified.

      (P.A. 79-458, S. 18, 19; P.A. 80-262, S. 8, 10; P.A. 97-22, S. 21; 97-47, S. 39.)

      History: P.A. 80-262 required that information be made public as prescribed by provisions of chapter 3 rather than "under such regulations as the commissioner prescribes" in Subsec. (c) and substituted charges provided for in chapter 3 for "reasonable" charges prescribed by commissioner in Subsec. (d); Sec. 36-520 transferred to Sec. 36b-78 in 1995; P.A. 97-22 made technical changes in Subsecs. (b) and (d); P.A. 97-47 substituted "the Freedom of Information Act, as defined in section 1-18a" for "chapter 3" in Subsecs. (c) and (d).

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      Sec. 36b-79. (Formerly Sec. 36-521). Renewal of registration. Amended disclosure document. Not later than one hundred twenty days after the end of the seller's most recent fiscal year and each year thereafter, each seller whose business opportunity has been registered under sections 36b-60 to 36b-80, inclusive, shall renew the registration by submitting to the commissioner: (1) An annual renewal registration fee of one hundred dollars, which shall be nonrefundable; (2) a filing in accordance with the requirements of subsection (b) of section 36b-62, reflecting all amendments as of the date of filing; (3) a disclosure document filed in accordance with the requirements of sections 36b-62 and 36b-63, reflecting all amendments, clearly marked, since the date of the most recent disclosure document that was filed with the commissioner, or, if no such amendments have been made, an affidavit so stating; and (4) financial statements in accordance with the requirements of subsection (b) of section 36b-62. If the seller fails to submit the fee and information within the time period and in accordance with requirements of this section, the registration of such seller's business opportunity shall terminate.

      (P.A. 80-262, S. 9, 10; P.A. 88-150, S. 7; 88-339, S. 3; P.A. 96-73, S. 3; P.A. 97-22, S. 22; P.A. 06-75, S. 2; P.A. 09-160, S. 8; P.A. 10-32, S. 115.)

      History: P.A. 88-150 increased the annual renewal registration fee to $100; P.A. 88-339 amended Subsec. (2) to require the seller to file annually an application reflecting all amendments and amended Subsec. (3) to require the seller to annually file a disclosure document reflecting all amendments; Sec. 36-521 transferred to Sec. 36b-79 in 1995; P.A. 96-73 amended Subdiv. (3) to clarify requirements for disclosure statements and made technical changes; P.A. 97-22 made a technical change; P.A. 06-75 amended Subdiv. (1) to provide that annual renewal registration fee of $100 is nonrefundable; P.A. 09-160 made technical changes; P.A. 10-32 made technical changes, effective May 10, 2010.

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      Sec. 36b-80. False or misleading statements prohibited. No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under sections 36b-60 to 36b-80, inclusive, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect or, in connection with the statement, omit to state a material fact necessary to make the statement made, in the light of the circumstances under which it was made, not false or misleading.

      (P.A. 96-73, S. 4; P.A. 97-22, S. 23; P.A. 99-38, S. 9; P.A. 00-61, S. 6, 9; P.A. 09-160, S. 9.)

      History: P.A. 97-22 made a technical change; P.A. 99-38 added "investigation or examination"; P.A. 00-61 prohibited false or misleading oral statements, effective July 1, 2000; P.A. 09-160 added provision re omission of material fact necessary to make statement made not false or misleading.

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