Business Opportunities Weblog

April 23, 2004 by Dane Carlson | 3 Comments

Seller Assisted Marketing Plans sellers are required to file with the Attorney General’s Office prior to advertising or selling business opportunities in California. The Attorney General’s Office then reviews the information for compliance with law before the company can begin selling in California. The SAMP law requires that the seller give the same information to prospective purchasers at least 48 hours before the purchaser signs any contract or pays the seller any money.

Seller Assisted Marketing Plans are defined in the California Civil Code as follows:

(A) ‘Seller assisted marketing plan’ means any sale or lease or offer to sell or lease any product, equipment, supplies, or services which requires a total initial payment exceeding five hundred dollars ($500), but requires an initial cash payment of less than fifty thousand dollars
($50,000), which will aid a purchaser or will be used by or on behalf of the purchaser in connection with or incidental to beginning, maintaining, or operating a business when the Seller Assisted Marketing Plan seller has advertised or in other manner solicited the purchase or lease of the Seller Assisted Marketing Plan and done any of the following acts:

• (1) Represented that the purchaser will earn, is likely to earn, or can earn an amount in excess of the initial payment paid by the purchaser for participation in the Seller Assisted Marketing Plan.
• (2) Represented that there is a market for the product, equipment, supplies, or services, or any product marketed by the user of the product, equipment, supplies, or services sold or leased or offered for sale or lease to the purchaser by the seller, or anything, be it tangible or intangible, made, produced, fabricated, grown, bred, modified, or developed by the purchaser using, in whole or in part, the product, supplies, equipment, or services which were sold or leased or offered for sale or lease to the purchaser by the Seller Assisted Marketing Plan seller.
• (3) Represented that the seller will buy back or is likely to buy back any product made, produced, fabricated, grown, or bred by the purchaser using, in whole or in part, the product, supplies, equipment, or services which were initially sold or leased or offered for sale or lease to the purchaser by the Seller Assisted Marketing Plan seller.

As part of the filing, the prospective seller must provide the Attorney General’s Office with information about the company including; the people running the company, the financial condition of the company and the length of time that the company has been in business and a copy of the contract they plan to have the purchasers sign. The SAMP Act prohibits statements about potential earnings unless data is given about average earnings and prohibits charging payment of more than 20% in advance of delivering goods and services.

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