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Indiana Code Title 23. Business and Other Associations § 23-2-2.5-14

Current as of January 02, 2024 | Updated by Findlaw Staff

Sec. 14.  (a) The commissioner may, without a hearing, issue a stop order denying the effectiveness of or suspending or revoking the effectiveness of a registration if the commissioner finds that the issuance of the order is in the public interest and also finds that:

(1) there has been a failure to comply with this chapter or the rules or orders of the commissioner pertaining to this chapter;

(2) the offer or sale of the franchise would constitute misrepresentation to, or deceit or fraud on, the purchasers or offerees;

(3) the franchisor has failed to comply with any rule promulgated or order issued pursuant to section 12 of this chapter;  or

(4) the franchisor, or the franchisor's predecessor, or any of the franchisor's directors, trustees, general partners, chief executives, financial officers, accounting officers, franchise sales officers, or other principal officers, or, if the franchisor is a limited liability company, any member or manager of the franchisor:

(A) during the ten (10) year period immediately preceding the date of registration, has:

(i) been convicted of a felony;

(ii) pleaded nolo contendere to a felony charge;  or

(iii) been held liable in a civil action by final judgment;

if the felony or civil action involved fraud, embezzlement, misappropriation of property, or the violation of any state or federal statute involving the offer or sale of securities or franchises;

(B) is subject to any currently effective order affecting the franchise resulting from a proceeding or pending action brought by any individual or public agency or department;

(C) is a defendant in any pending criminal or material civil proceeding;

(D) during the ten (10) year period immediately preceding the date of registration, has been the defendant against whom a final judgment was entered in any material civil action;  or

(E) is the franchisor or a principal executive officer or general partner of the franchisor and has, during the ten (10) year period immediately preceding the date of registration, reorganized due to insolvency or been adjudicated as a bankrupt.

(b) An order issued under this section based on a finding by the commissioner under subsection (a)(4)(A) must include a description of the charge, violation, or judgment referred to in subsection (a)(4)(A).  An order issued under this section based on a finding by the commissioner under subsection (a)(4)(B) must include a copy of the order referred to in subsection (a)(4)(B).  An order issued under this section based on a finding by the commissioner under subsection (a)(4)(D) must include a description of the judgment referred to in subsection (a)(4)(D).  An order issued under this section based on a finding by the commissioner under subsection (a)(4)(E) must include a description of the insolvency or adjudication referred to in subsection (a)(4)(E).

(c) Before issuing a stop order under subsection (a)(4), such an order must be based on a finding by the commissioner that involvement of a person referred to in subsection (a)(4) creates an unreasonable risk to prospective franchisees.

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Cite this article: FindLaw.com - Indiana Code Title 23. Business and Other Associations § 23-2-2.5-14 - last updated January 02, 2024 | https://codes.findlaw.com/in/title-23-business-and-other-associations/in-code-sect-23-2-2-5-14/

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