The Kentucky Business Opportunity Law (KBOA) governs the sale of business opportunities within the state, aiming to protect investors from fraud and misrepresentation. This legislation requires business opportunity sellers to adhere to specific disclosure standards before entering into any agreement with potential buyers.

Under the KBOA, sellers must provide clear, accurate information regarding the business opportunity, including but not limited to:

  • Detailed descriptions of the product or service offered.
  • Full financial disclosure, including investment costs and potential earnings.
  • Information about any existing or past lawsuits involving the opportunity.

Important: Failure to comply with these disclosure requirements can lead to penalties, including fines and legal action. Buyers have the right to rescind contracts if the law is violated.

Additionally, the law stipulates that business opportunity sellers must file a registration with the state, which is subject to periodic review. These regulations are designed to foster transparency and reduce the risk of misleading business propositions.

Requirement Description
Disclosure of Earnings Provide clear projections of income potential based on actual data from similar business opportunities.
Registration Sellers must register their business opportunity with the state before marketing or selling.
Refund Policy Details about the buyer's right to cancel the agreement and any associated refund policies must be disclosed.