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Using Disclosure Agreements For Home Work Busienss Opporutnities |
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Written by Myles Krueger
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Thursday, 09 October 2008 18:02 |
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This is a protection for any potential buyer to be informed of any unpaid tax liabilities, penalties or bankruptcies known to the seller. Any qualified entities, shareholders, or beneficiaries entering into a voluntary disclosure agreement must fully disclose all facts. The participants must complete an application form FTB 4925.
by MylesKrueger
This is a protection for any potential buyer to be informed of any unpaid tax liabilities, penalties or bankruptcies known to the seller. Any qualified entities, shareholders, or beneficiaries entering into a voluntary disclosure agreement must fully disclose all facts. The participants must complete an application form FTB 4925.
This disclosure agreement is commonly signed when two companies or individuals are considering doing business together. It is used to understand the process used in each others business or the selling of one business to a buyer. In this paper, it will be referred to as a protection between a licensee (buyer) as well as the licensor (seller).
The aggressive actions at the state level especially have saved many would-be licensees from loosing money and have had a broad-ranging impact on the business industry. There are now incredible entrepreneurial success stories in the making due to the Federal Trade Commission Rule (FTC) that was passed. This act now defines business opportunity ventures.
The licensor has the obligation to state any financial arrangements. The disclosure must state what the parent company will provide in terms of equipment, training, services and manuals. If the licensee has to purchase any materials from a supplier that must be stated.
Not all states are the same in their legal requirements for the disclosure agreement. In 26 states, they have legal requirements for disclosure statements and registration. Some states do not require a full registration, but do require a disclosure that follows a specific format.
These are rules that both parties have discussed prior and have come to an agreement with. The disclosure agreement is a formal statement so there are no unknown items and all sections are now being legally documented. This states how you the buyer will actual participate in the operation of the business.
If there are any questions regarding the history of the company you are planning to purchase, ask. The history of the parent company needs to be detailed. It should include the identity and business experience of any persons affiliated.
Ask the salesperson, seller or representative for the phone contact of the local state agency or FTC office that has advised them of the exempt status. The only reasons for an exemption are those where the total initial payment is less than $500. The other possibility is when payment is made for inventory sold at bona fide wholesale price.
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