Title 37 — TRADE REGULATION

Terms used in this chapter, unless the context otherwise requires, mean: (1) "Advertising," any circular, prospectus, advertisement, or other material or any communication by radio, television, pictures, or similar means used in connection with an offer or sale of any business op…

A registration fee of one hundred dollars shall accompany the application for registration. Source: SL 1985, ch 305 , § 10.

A registration is automatically effective upon the expiration of the tenth full business day after a complete filing if no order is issued or proceeding is pending under §

The registration is effective for one year commencing on the date of effectiveness and may be renewed annually upon the filing of a current disclosure document accompanied by any document or information that the director of the Division of Insurance required. The registration ren…

The director of the Division of Insurance may by rule or order require the filing of all proposed literature or advertising prior to its use. Source: SL 1985, ch 305 , § 13; SL 2017, ch 231 (Ex. Ord. 17-2 ), § 19, eff. Apr. 13, 2017.

No person may offer or sell any business opportunity required to be registered under this chapter unless a written disclosure document as filed under § 37-25A-8 is delivered to each purchaser at least ten business days prior to the execution by a purchaser of any contract or agre…

The disclosure document shall have a cover sheet entitled, in at least ten - point bold type, "DISCLOSURE REQUIRED BY SOUTH DAKOTA." Under the title shall appear the statement in at least ten - point type that "THE REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES NOT CONSTITUTE APP…

No person may offer or sell any business opportunity required to be registered unless the business opportunity contract or agreement is in writing and a copy of the contract or agreement is given to the purchaser at the time the purchaser signs the contract or agreement. Source: …

Any contract or agreement shall set forth in at least ten - point type or equivalent size, if handwritten, the following: (1) The terms and condition of any payments due to the seller; (2) The seller's principal business address and the name and address of the seller's agent in t…

The director of the Division of Insurance may issue an order denying, suspending or revoking the effectiveness of any registration if the director finds that the order is in the public interest and that: (1) The registration as of its effective date or as of any earlier date in t…

The director of the Division of Insurance may not institute a proceeding under § 37-25A-18 against an effective registration on the basis of a fact or transaction known to the director when the registration became effective unless the proceeding is instituted within the next thir…

For the purposes of this chapter, the term, business opportunity, does not include: (1) Any offer or sale of an on-going business operated by the seller and sold in its entirety; (2) Any offer or sale of a business opportunity to an on-going business if the seller provides produc…

The director of the Division of Insurance may by order summarily postpone or suspend the effectiveness of the registration pending final determination of any proceeding under this chapter. Upon the entry of the order, the director shall promptly notify the seller that the order h…

No stop order may be entered under any part of this chapter, except under § 37-25A-20 , without appropriate prior notice to the seller, opportunity for hearing, and written findings of fact and conclusions of law. Source: SL 1985, ch 305 , § 21.

The director of the Division of Insurance may vacate or modify an order issued under this chapter if the director finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so. Source: SL 1985, ch 305 , § 22; SL 2017, ch 2…

In connection with the offer or sale of a business opportunity, no seller may make or use any of the representations set forth in subsections 37-25A-1(2)(d) and (2)(e) unless the seller has at all times a minimum net worth of twenty-five thousand dollars as determined in accordan…

If the seller is required to obtain a surety bond, the seller shall maintain a surety bond for the duration of the guarantee or representation giving rise to the surety bond requirement. Upon expiration of the period of the guarantee, the seller may allow the surety bond to lapse…

The director of the Division of Insurance may not use for personal benefit any information which is filed with or obtained by the director and which is not made public. The director may not disclose any information except if necessary or appropriate in a proceeding or investigati…

The director of the Division of Insurance may: (1) Make public or private investigations within or outside of this state to determine if any person has violated or is about to violate any provision of this chapter or any rule or order hereunder, or to aid in the enforcement of th…

For the purpose of any investigation or proceeding under this chapter, the director of the Division of Insurance or any officer designated by the director may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence and require the …

If any person refuses to obey a subpoena issued pursuant to § 37-25A-27 , the circuit court upon application by the director of the Division of Insurance, may issue an order requiring such person to comply with the subpoena. Source: SL 1985, ch 305 , § 28; SL 2017, ch 231 (Ex. Or…

No person may be excused from attending and testifying or from producing any document or record in any proceeding before the director of the Division of Insurance or any officer designated by the director on the grounds that the testimony or evidence, documentary or otherwise, re…

The following business opportunities are exempt from §§ 37-25A-7 to 37-25A-24 , inclusive: (1) Any offer or sale of a business opportunity for which the immediate cash payment made by the purchaser for any business opportunity is at least twenty-five thousand dollars if the immed…

If it appears to the director of the Division of Insurance that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this chapter, the director may: (1) Issue an order directing the person to cease and desist from con…

Any person aggrieved by a final order of the director of the Division of Insurance may obtain a review of the order in the circuit court pursuant to the provisions of chapter 1-26 . Source: SL 1985, ch 305 , § 31; SL 2017, ch 231 (Ex. Ord. 17-2 ), § 19, eff. Apr. 13, 2017.

The director of the Division of Insurance may promulgate rules pursuant to chapter 1-26 to carry out the provisions of this chapter including rules and forms governing disclosure documents, applications and reports, and defining any terms. For the purpose of rules and forms, the …

No rule, form, or order may be made, amended, or rescinded unless the director of the Division of Insurance finds that the action is necessary or appropriate in the public interest or for the protection of the purchaser. In prescribing rules and forms the director may cooperate w…

No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, or order of the director of the Division of Insurance, notwithstanding that the rule, form, or order may later be amended or rescinded or may be…

A document is filed when it is received by the director of the Division of Insurance. The director shall keep a register of all applications for registration and disclosure documents which are or have been effective under this chapter and all orders which have been entered under …

The director of the Division of Insurance may honor written requests from interested persons for interpretative opinions upon the payment of twenty-five dollars. Source: SL 1985, ch 305 , § 36; SL 2017, ch 231 (Ex. Ord. 17-2 ), § 19, eff. Apr. 13, 2017.

The provisions of this chapter concerning sales and offers to sell apply to persons who sell or offer to sell if: (1) An offer to sell is made in this state; (2) An offer to purchase is made and accepted in this state; or (3) The purchaser is domiciled in this state and the busin…

For the purpose of this chapter, an offer to sell is made in this state, whether either party is then present in this state, if: (1) The offer originates from this state; or (2) The offer is directed by the offeror to this state and received at the place to which it is directed o…

For the purpose of this chapter, an offer to sell is accepted in this state if acceptance: (1) Is communicated to the offeror in this state; and (2) Has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to th…

The director of the Division of Insurance may by order deny or revoke any exemption specified in § 37-25A-3 , except the exemption provided in subdivision 37-25A-3(2), with respect to a particular offering of one or more business opportunities. No such order may be entered withou…

An offer to sell is not made in this state if: (1) The publisher circulates 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 has had more than two - th…

If any person engages in conduct prohibited or made actionable by this chapter or any rule or order hereunder, and the person has not filed a consent to service of process and personal jurisdiction over the person cannot otherwise be obtained in this state, that conduct is equiva…

If process is served under this chapter, the court, or the director of the Division of Insurance in a proceeding before the director, shall order such continuance as necessary to afford the defendant or respondent reasonable opportunity to defend himself. Source: SL 1985, ch 305 …

No person, in connection with the offer or sale of any business opportunity in this state, may: (1) Employ any device, scheme, or artifice to defraud; (2) Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements ma…

No person may make or cause to be made, in any document filed with the director of the Division of Insurance or in any proceeding under this chapter, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any mater…

Neither the fact that an application for registration has been filed nor the fact that a business opportunity is effectively registered constitutes a finding by the director of the Division of Insurance that any document filed under this chapter is true, complete and not misleadi…

No person may, in connection with the offer or sale of any business opportunity in this state, publish, circulate, or use any advertising which contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the…

Any person who willfully violates §§ 37-25A-7 to 37-25A-9 , inclusive, 37-25A-14 , 37-25A-16 , 37-25A-23 , 37-25A-24 , 37-25A-43 , 37-25A-45 , and 37-25A-46 or who willfully violates any order of which the person has notice, or who violates § 37-25A-44 knowing that the statement …

Any person who violates §§ 37-25A-7 to 37-25A-9 , inclusive, 37-25A-14 , 37-25A-16 , 37-25A-23 , and 37-25A-24 is liable to the purchaser who may sue either at law or in equity for rescission, for recovery of all money or other valuable consideration paid for the business opportu…

Any person who violates §§ 37-25A-43 , 37-25A-45 , and 37-25A-46 is liable to the purchaser who may sue either at law or in equity for rescission, for recovery of all money or other valuable consideration paid for the business opportunity and for actual damages, together with int…

If the public interest or the protection of purchasers so requires, the director of the Division of Insurance may by order deny or revoke without a hearing any of the specified exemptions, except the exemption provided in subdivision 37-25A-3(2), pending final determination of an…

Any person who violates §§ 37-25A-14 , 37-25A-43 , 37-25A-45 , and 37-25A-46 , or who breaches any business opportunity contract or agreement or any obligation arising under the contract or agreement, is liable to the purchaser who may sue the surety of the bond, either at law or…

Any person who controls or materially aids a person liable under § 37-25A-46 or 37-25A-47 shall be liable jointly and severally with and to the same extent as the person committing the violation. Source: SL 1985, ch 305 , § 51.

No action may be maintained under §§ 37-25A-47 to 37-25A-49 , inclusive, unless commenced before the expiration of three years after the act of transaction constituting the violation. Source: SL 1985, ch 305 , § 52.

The rights and remedies under this chapter are in addition to any other rights or remedies that may exist at law or in equity. Source: SL 1985, ch 305 , § 53.

Any condition, stipulation or provision binding any purchaser of a business opportunity to waive compliance with or relieving a person from any duty or liability imposed by or any right provided by this chapter or any rule or order issued pursuant to this chapter is void. Source:…