Title BC, Business and Commerce Code

Sec. 51.005. BURDEN OF PROOF. A person who claims to be exempt from this chapter has the burden of proving the exemption. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.01, eff. April 1, 2009.

Sec. 51.006. WAIVER. A waiver of this chapter is contrary to public policy and void. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.01, eff. April 1, 2009.

Sec. 51.007. MAINTENANCE OF RECORDS. (a) A seller shall maintain a complete set of books, records, and accounts of business opportunity sales made by the seller. (b) A document relating to a business opportunity sold or leased shall be maintained until the fourth anniversary of t…

Sec. 51.008. FILING FEE. The secretary of state may charge a reasonable fee to cover the costs incurred as a result of a filing required by Subchapter B or Section 51.003 or 51.251. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.01, eff. April 1, 2009.

Sec. 51.009. RULES. The secretary of state may adopt rules to administer and enforce this chapter. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 2.01, eff. April 1, 2009. SUBCHAPTER B. REGISTRATION OF BUSINESS OPPORTUNITY

Sec. 51.051. FILING OF DISCLOSURE STATEMENTS AND LIST OF SELLERS. Before a sale or offer for sale, including advertising, of a business opportunity, the principal seller must register the business opportunity with the secretary of state by filing: (1) a copy of the disclosure sta…

Sec. 51.052. UPDATING OF INFORMATION ON FILE. (a) A copy of a disclosure statement filed under Section 51.051 must be updated through a new filing: (1) annually; and (2) when a material change occurs. (b) The list filed under Section 51.051(2) must be updated through a new filing…

Sec. 51.053. FILING OF DISCLOSURE DOCUMENT FROM OTHER REGULATORY AGENCY. Instead of filing with the secretary of state a copy of a disclosure statement, a seller may file a copy of a similar document required by the State Securities Board, Securities and Exchange Commission, or F…

Sec. 51.054. FILING OF COPY OF BOND OR NOTIFICATION OF ACCOUNT. A principal seller who is required to obtain a bond or establish a trust account under Subchapter C shall contemporaneously file with the secretary of state a copy of: (1) the bond; or (2) the formal notification by …

Sec. 51.101. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT REQUIRED. (a) Before a seller makes a representation described by Section 51.003(a)(1) or otherwise represents that the purchaser is assured of making a profit from a business opportunity, the principal seller must: (1) obtain…

Sec. 51.102. ACTION AGAINST BOND, TRUST ACCOUNT, OR LETTER OF CREDIT. (a) A person may bring an action against the bond, trust account, or irrevocable letter of credit obtained or established under Section 51.101 to recover actual damages for: (1) a violation of this chapter; or …

Sec. 51.151. DISCLOSURE TO PURCHASER OF BUSINESS OPPORTUNITY. (a) Except as provided by Section 51.164, a seller must provide a purchaser with a written disclosure statement that meets the requirements of this subchapter. (b) The seller must provide the disclosure statement at le…

Sec. 51.152. COVER SHEET OF DISCLOSURE STATEMENT. (a) A disclosure statement must have a cover sheet titled, in at least 12-point boldface capital letters, "DISCLOSURES REQUIRED BY TEXAS LAW." The following statement must appear below the title in at least 10-point boldface type:…

Sec. 51.153. CONTENTS: NAMES AND ADDRESSES. A disclosure statement must contain: (1) the name of the seller; (2) each name under which the seller has transacted, is transacting, or intends to transact business; (3) the name of any parent or affiliated company that will engage in …

Sec. 51.154. CONTENTS: SALES PERIODS. A disclosure statement must: (1) specify the period during which the seller has sold business opportunities; and (2) specify the period during which the seller has sold business opportunities involving the products, equipment, supplies, or se…

Sec. 51.155. CONTENTS: SERVICES DESCRIPTION. A disclosure statement must contain: (1) a detailed description of the actual services the seller undertakes to perform for the purchaser; and (2) if the seller promises to perform services in connection with the placement of products,…

Sec. 51.156. CONTENTS: UPDATED FINANCIAL STATEMENT. A disclosure statement must contain a copy of a financial statement of the seller that: (1) was prepared according to generally accepted accounting principles within the previous 13 months; and (2) has been updated to reflect an…

Sec. 51.157. CONTENTS: TRAINING DESCRIPTION. If the seller promises training, the disclosure statement must contain a complete description of the training, including: (1) the length of the training; and (2) any costs of the training that the purchaser will be required to incur, i…

Sec. 51.158. CONTENTS: SECURITY DESCRIPTION. If the seller is required to obtain a bond or establish a trust account, the disclosure statement must contain one of the following statements, as applicable: (1) "As required by Texas law, the seller has secured a bond issued by _____…

Sec. 51.159. CONTENTS: DELIVERY DATE; CANCELLATION OF CONTRACT. If the seller is required to deliver to the purchaser the product, equipment, or supplies necessary to begin substantial operation of the business and states a definite or approximate delivery date for the product, e…

Sec. 51.160. CONTENTS: SALES OR EARNINGS REPRESENTATION. If the seller makes a statement concerning sales or earnings that may be made through the business opportunity, the disclosure statement must contain a statement disclosing: (1) the total number of purchasers of business op…

Sec. 51.161. CONTENTS: LEGAL ACTION HISTORY. (a) A disclosure statement must contain a statement disclosing any person described by Section 51.153 who: (1) has, during the previous seven fiscal years: (A) been convicted of a felony, or pleaded nolo contendere to a felony charge, …

Sec. 51.162. CONTENTS: BANKRUPTCY OR REORGANIZATION. (a) A disclosure statement must contain a statement disclosing any person described by Section 51.153 who has, during the previous seven fiscal years: (1) filed in bankruptcy; (2) been adjudged bankrupt; (3) been reorganized be…

Sec. 51.163. CONTENTS: CONTRACT COPY. A disclosure statement must contain a copy of the business opportunity contract that the seller uses as a matter of course and that will be presented to the purchaser at closing. Amended by: Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Se…

Sec. 51.164. USE OF DISCLOSURE DOCUMENT FROM OTHER REGULATORY AGENCY. Instead of providing a disclosure statement to a purchaser under this subchapter, a seller may provide a copy of a similar document required by the State Securities Board, Securities and Exchange Commission, or…

Sec. 51.201. FORM OF BUSINESS OPPORTUNITY CONTRACT. A business opportunity contract must be in writing and include, in 10-point type or in handwriting of an equivalent size, the following: (1) the terms of payment, including the initial consideration, down payment, and additional…

Sec. 51.202. DELIVERY OF COPIES OF DOCUMENTS TO PURCHASER. A copy of the completed business opportunity contract and any other document the seller requires the purchaser to sign shall be given to the purchaser at the time the purchaser signs the contract. Amended by: Acts 2007, 8…

Sec. 51.203. EFFECT OF ASSIGNMENT OF BUSINESS OPPORTUNITY CONTRACT. An assignee of a business opportunity contract or of the seller's rights under the contract is subject to all equities, rights, and defenses of the purchaser against the seller. Amended by: Acts 2007, 80th Leg., …

Sec. 51.251. VOLUNTARY TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION. The principal seller of a registered business opportunity may voluntarily terminate the business opportunity's registration with the secretary of state if: (1) the registered business opportunity will no lon…

Sec. 51.252. INVOLUNTARY TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION. (a) The secretary of state may terminate the registration of a business opportunity registered under Section 51.051 if the seller does not comply with Section 51.052. (b) The secretary of state must give t…

Sec. 51.301. PROHIBITED ACTS. A seller may not: (1) employ a representation, device, scheme, or artifice to deceive a purchaser; (2) make an untrue statement of a material fact or omit to state a material fact in connection with the documents and information required to be provid…

Sec. 51.302. DECEPTIVE TRADE PRACTICE; REMEDIES. (a) A violation of this chapter is a false, misleading, or deceptive act or practice under Section 17.46. (b) A public or private right or remedy prescribed by Chapter 17 may be used to enforce this chapter. Amended by: Acts 2007, …

Sec. 51.303. REVIEW AND SUIT BY ATTORNEY GENERAL. (a) The attorney general may review the copy of a disclosure statement filed with the secretary of state under Subchapter B. (b) If the disclosure statement fails to comply with this chapter, the attorney general may: (1) notify t…