| 6 | 6 | | ANACT |
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| 7 | 7 | | Torepealsections407.400and407.405,RSMo,andtoenactinlieuthereoftwonewsections |
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| 8 | 8 | | relatingtopyramidsalesschemes. |
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| 9 | 9 | | BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows: |
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| 10 | 10 | | SectionA.Sections407.400and407.405,RSMo,arerepealedandtwonewsections |
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| 11 | 11 | | 2enactedinlieuthereof,tobeknownassections407.400and407.405,toreadasfollows: |
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| 12 | 12 | | 407.400.Asusedinsections407.400to407.420, thefollowingtermsmean: |
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| 13 | 13 | | 2 (1)"Bonafideinventoryrepurchaseprogram",aprogrambywhichanentity |
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| 14 | 14 | | 3repurchasesfromasalespersoncurrentandmarketableinventoryinpossessionofthe |
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| 15 | 15 | | 4salesperson,onrequestandoncommerciallyreasonableterms,whenthesalesperson's |
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| 16 | 16 | | 5businessrelationshipisterminated; |
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| 17 | 17 | | 6 (2)"Commerciallyreasonableterms",therepurchaseofcurrentand |
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| 18 | 18 | | 7marketableinventorywithintwelvemonthsafterthedateofpurchaseatnotless |
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| 19 | 19 | | 8thanninetypercentoftheoriginalnetcost,lessappropriateset-offsandlegalclaims,if |
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| 20 | 20 | | 9any; |
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| 21 | 21 | | 10 (3)"Compensation",apaymentofanymoney,athingofvalue,orfinancial |
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| 22 | 22 | | 11benefitconferredinreturnforinducinganotherpersontoparticipateinapyramidsales |
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| 23 | 23 | | 12scheme; |
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| 24 | 24 | | 13 (4)"Consideration",thepaymentofcashorthepurchaseofgoods,services,or |
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| 25 | 25 | | 14intangibleproperty.Thetermshallnotincludethepurchaseofgoodsandservices |
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| 26 | 26 | | 15furnishedatcosttobeusedinmakingsalesandnotforresale,ortimeandeffortspent |
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| 27 | 27 | | 16inpursuitofsalesorrecruitingactivities.Thetermshallnotincludepaymentforsales |
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| 32 | 32 | | 20 (a)Isnolongerwithinitscommerciallyreasonableuseorshelf-lifeperiod; |
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| 33 | 33 | | 21 (b)Wasclearlydescribedtosalespersonspriortopurchaseasseasonable, |
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| 34 | 34 | | 22discontinued,orspecialpromotionproductsnotsubjecttotheplanororganization's |
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| 35 | 35 | | 23inventoryrepurposeprogram;or |
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| 36 | 36 | | 24 (c)Hasbeenusedoropened; |
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| 37 | 37 | | 25 (6)"Franchise"[means], awrittenororalarrangementforadefiniteorindefinite |
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| 38 | 38 | | 26period,inwhichapersongrantstoanotherpersonalicensetouseatradename,trademark, |
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| 39 | 39 | | 27servicemark,orrelatedcharacteristic,andinwhichthereisacommunityofinterestinthe |
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| 40 | 40 | | 28marketingofgoodsorservicesatwholesale,retail,bylease,agreement,orotherwise, |
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| 41 | 41 | | 29includingbutnotlimitedtoacommercialrelationshipofdefinitedurationorcontinuing |
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| 42 | 42 | | 30indefiniteduration,betweena"wholesaler",suchwholesalerbeingapersonasdefinedinthis |
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| 43 | 43 | | 31section,licensedpursuanttotheprovisionsofchapter311tosellatwholesale,intoxicating |
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| 44 | 44 | | 32liquor,asdefinedinsection311.020,toretailers,dulylicensedinthisstate,anda"supplier", |
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| 45 | 45 | | 33beingapersonengagedinthebusinessasamanufacturer,distiller,rectifierorout-of-state |
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| 46 | 46 | | 34solicitorwhosebrandsofintoxicatingliquoraredistributedthroughdulylicensedwholesalers |
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| 47 | 47 | | 35inthisstate,andwhereinawholesalerisgrantedtherighttooffer,sell,anddistributewithin |
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| 48 | 48 | | 36thisstateoranydesignatedareathereofsuchofthesupplier'sbrandsofintoxicatingliquor,or |
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| 49 | 49 | | 37allofthem,asmaybespecified;exceptthat,theterm"franchise"shallnotapplytopersons |
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| 50 | 50 | | 38engagedinsalesfromwarehousesorlikeplacesofstorage,otherthanwholesalersasabove |
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| 51 | 51 | | 39described,leaseddepartmentsofretailstores,placesoforiginalmanufacture,norshallthe |
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| 52 | 52 | | 40term"franchise"applytoacommercialrelationshipthatdoesnotcontemplatethe |
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| 53 | 53 | | 41establishmentormaintenanceofaplaceofbusinesswithinthestateofMissouri.Asused |
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| 54 | 54 | | 42herein"placeofbusiness"meansafixed,geographicallocationatwhichgoods,productsor |
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| 55 | 55 | | 43servicesaredisplayedordemonstratedforsale; |
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| 56 | 56 | | 44 [(2)Theterm] (7)"Goods", includesanypersonalproperty,realproperty,orany |
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| 57 | 57 | | 45combinationthereof; |
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| 58 | 58 | | 46 [(3)Theterm"otherproperty"includesafranchise,licensedistributorship,orother |
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| 59 | 59 | | 47similarright,privilege,orinterest; |
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| 60 | 60 | | 48 (4)Theterm] |
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| 61 | 61 | | 49 (8)"Inventory",includesbothgoodsandservices,includingcompany-produced |
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| 62 | 62 | | 50promotionalmaterials,salesaids,andsaleskitsthatanentityrequiresindependent |
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| 63 | 63 | | 51salespersonstopurchase; |
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| 64 | 64 | | 52 (9)"Inventoryloading",therequirementorencouragementbyaplanor |
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| 65 | 65 | | 53operationtohavetheindependentsalespersonoftheplanoroperationpurchase |
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| 69 | 69 | | 57unincorporatedassociation,oranyotherlegalorcommercialentity; |
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| 70 | 70 | | 58 (11)"Promote",tocontrive,prepare,establish,plan,operate,advertise,or |
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| 71 | 71 | | 59otherwiseinduceorattempttoinduceanotherpersontoparticipateinapyramidsales |
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| 72 | 72 | | 60scheme; |
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| 73 | 73 | | 61 [(5)Theterm](12)"Pyramidsalesscheme"[includes], anyplanoroperation[forthe |
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| 74 | 74 | | 62saleordistributionofgoods,servicesorotherpropertywhereinapersonforaconsideration |
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| 75 | 75 | | 63acquirestheopportunitytoreceiveapecuniarybenefit,whichisnotprimarilycontingenton |
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| 76 | 76 | | 64thevolumeorquantityofgoods,services,orotherpropertysoldordistributedortobesoldor |
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| 77 | 77 | | 65distributedtopersonsforpurposesofresaletoconsumers,andisbasedupontheinducement |
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| 78 | 78 | | 66ofadditionalpersons,byhimselforherselforothers,regardlessofnumber,toparticipatein |
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| 79 | 79 | | 67thesameplanoroperation;and |
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| 80 | 80 | | 68 (6)Theterm"saleordistribution"includestheactsofleasing,rentingorconsigning] |
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| 81 | 81 | | 69bywhichapersongivesconsiderationfortheopportunitytoreceivecompensationthat |
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| 82 | 82 | | 70isderivedprimarilyfromtheintroductionofotherpersonsintotheplanoroperation |
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| 83 | 83 | | 71ratherthanfromthesaleandconsumptionofgoods,services,orintangiblepropertyby |
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| 84 | 84 | | 72aparticipantorotherpersonsintroducedintotheplanoroperation.Thetermincludes |
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| 85 | 85 | | 73anyplanoroperationunderwhichthenumberofpeoplewhomayparticipateislimited |
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| 86 | 86 | | 74eitherexpresslyorbytheapplicationofconditionsaffectingtheeligibilityofapersonto |
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| 87 | 87 | | 75receivecompensationundertheplanoroperationandincludesanyplanoroperation |
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| 88 | 88 | | 76underwhichaperson,ongivinganyconsideration,obtainsanygoods,services,or |
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| 89 | 89 | | 77intangiblepropertyinadditiontotherighttoreceivecompensation. |
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| 90 | 90 | | 407.405.1.Nopersonshall,directlyorthroughtheuseofagentsorintermediaries, |
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| 91 | 91 | | 2inconnectionwiththesaleordistributionofgoods,service,orotherproperty,sell,offeror |
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| 92 | 92 | | 3attempttosellaparticipationortherighttoparticipateinapyramidsalesscheme.Noperson |
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| 93 | 93 | | 4whohasgrantedafranchisetoanotherpersonshallcancelorotherwiseterminateanysuch |
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| 94 | 94 | | 5franchiseagreementwithoutnotifyingsuchpersonofthecancellation,terminationorfailure |
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| 95 | 95 | | 6torenewinwritingatleastninetydaysinadvanceofthecancellation,terminationorfailure |
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| 96 | 96 | | 7torenew,exceptthatwhencriminalmisconduct,fraud,abandonment,bankruptcyor |
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| 97 | 97 | | 8insolvencyofthefranchisee,orthegivingofanoaccountorinsufficientfundscheckisthe |
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| 98 | 98 | | 9basisorgroundsforcancellationortermination,theninetydays'noticeshallnotberequired. |
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| 99 | 99 | | 10 2.(1)Theprovisionsofthissectionshallnotbeconstruedtoprohibitaplanor |
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| 100 | 100 | | 11operation,ortodefineaplanoroperationasapyramidsalesscheme,iftheparticipants |
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| 101 | 101 | | 12intheplanoroperationgiveconsiderationinreturnfortherighttoreceive |
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| 102 | 102 | | 13compensationbaseduponpurchasesofgoods,services,orintangiblepropertyfor |
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| 105 | 105 | | 16program. |
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| 106 | 106 | | 17 (2)Apersonshallclearlydescribeabonafideinventoryrepurchasingprogram |
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| 107 | 107 | | 18inanyrecruitingliterature,salesmanual,andcontractswithindependentsalespersons. |
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| 108 | 108 | | 19Therecruitingliterature,salesmanual,orcontractshalldiscloseanyinventorythatis |
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| 109 | 109 | | 20noteligibleforrepurchaseundertheprogram. |
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| 110 | 110 | | 21 (3)Abonafideinventoryrepurchaseprogramisnotrequiredtoapplyto |
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| 111 | 111 | | 22inventorythatisnolongerwithintheinventory'scommerciallyreasonableuseorshelf- |
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| 112 | 112 | | 23lifeperiodorhasbeenusedoropened. |
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| 113 | 113 | | 24 3.Beforeasalespersonoftheentitypurchasesanynewinventory,theentityshall |
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| 114 | 114 | | 25clearlydescribetheinventorythatisexcludedfromthebonafideinventoryrepurchase |
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| 115 | 115 | | 26programasseasonal,discontinued,orspecialpromotionproductsandtheinventory |
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| 116 | 116 | | 27thatisnotsubjecttotheentity'sbonafideinventoryrepurchaseprogram. |
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| 117 | 117 | | âś” |
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