Sec. 1770.80 - Change of Name, Ownership, or Form of Business Organization

ยง 1770.80. Change of Name, Ownership, or Form of Business Organization

a) A licensed sales agent shall report to the Superintendent at least 30 days prior to the effective date of change, any change of name, change of business organization or change of ownership, except to the extent the change occurs as a result of the transfer of interest in publicly traded securities, in which case the reporting must occur within 30 days after the transfer or at the time that any reporting of the ownership interest must be made to the federal Securities and Exchange Commission, whichever is earlier. Reporting may be accomplished by completing a departmental form provided for such purpose or by mailing notice of the proposed change by certified mail, return receipt requested, postmarked on or before the 30th day prior to the effective date of change, and addressed to the Department as follows:

Department of the Lottery

Licensing Unit

101 West Jefferson Street, MC5-940

Springfield, Illinois 62794-9015

800/752-9568

.

b) Each notification of change of name, ownership or form of business organization of a licensee communicated to the Superintendent shall include the following information:

1) The name, address and agent identification number of the licensed sales agent;

2) The name of the business as it appears on the license application;

3) The proposed new name of the business, if applicable;

4) The current form of business organization;

5) The proposed form of business organization, if applicable;

6) The current owners, managers or shareholders of the business, as is indicated in the license application;

7) The proposed changes of ownership, including the names and addresses of the proposed new owners, managers or shareholders, the percentage of proposed transfer of equity, management control, legal ownership, shares or stock; and

8) The anticipated date of the proposed change in name, business organization or ownership.

c) The Superintendent shall review the changes, considering current licensing standards, as provided in the Act and this Part.

d) The Superintendent, upon approval of a change in name or a change of business organization that does not also involve a change of ownership, shall issue a replacement license reflecting the new name or business structure. The replacement license shall have an expiration date no later than the expiration date provided in the previous license.

e) Except as provided in this subsection (e), any change of business ownership shall necessitate termination of the existing licensing agreement, as of the effective date of the change of ownership. The new owner must submit an application and fee as provided in Section 1770.20. If the existing agent has not provided the Department with required written notification of the change, the applicant may be required to furnish documentation evidencing the change in ownership, such as a sales contract. The current license number may be assigned to the new owner of a location in the following circumstances:

1) If a chain account location previously operated by a franchisee continues operation under the franchisor or chain corporate management, and upon corporate guarantee and assumption of the financial obligations of the licensee;

2) If ownership of the location is assumed by an immediate family member of the original licensed agent (parent, sibling, child or grandparent), and the following conditions are met:

A) The location is in good standing with the Lottery;

B) The family member assuming ownership was involved in the day-to-day operation of the business prior to transfer;

C) The family member assuming ownership is qualified to hold a Lottery license.

f) In the event of the proven incapacity, death, receivership, bankruptcy or assignment for the benefit of creditors of any licensed agent, and upon approval of the Superintendent, the license may continue under a court-approved or court-confirmed guardian, executor or administrator, receiver or trustee for the benefit of creditors, who may continue to operate the business designated under the license, subject to the provisions of the Act and this Part, including the requirements that:

1) The person to whom the license is transferred must be otherwise qualified to hold a license;

2) The license following the transfer shall be void in the event the license transferee ceases to hold such court-appointed or court-confirmed position;

3) The Superintendent may condition the transfer of any license under this Section upon the posting of a bond, or a guaranteed payment in the form of a cashier's check or money order, on such terms and under such conditions as the Superintendent may deem necessary to protect the financial interests of the State, provided that any such bond shall reflect the reasonably anticipated risk of transfer.

g) Every change in the point of sale designated in the license shall be reported to the Superintendent no less than 30 days prior to the effective date of the change. If the change results from severe damage to or destruction of the point of sale specified in the license, as a result of fire, natural disaster or other cause beyond the control of the licensed sales agent, the licensed sales agent shall promptly notify the Superintendent of that destruction or damage to the business premises and the consequent change of location, but in no case shall the notification be later than three days after the damage to or destruction of the premises or change of location. Upon notification, the Superintendent shall consider the factors set forth in Section 1770.20 to determine whether the agent should be licensed to sell tickets at the new location. Upon the Superintendent's approval, a replacement license shall be issued having an expiration date no later than that of the agent's original license.

h) If a licensed sales agent fails to notify the Superintendent, in writing, of a change of ownership before the change occurs, all owners, officers or other responsible persons named in the Application for Lottery Sales Agent's License shall remain liable to the Superintendent for all tickets issued to or generated by the agent location, and all proceeds from the sale of the tickets (less prizes paid and/or commissions retained) to the date written notice is received by the Superintendent and a final settlement is conducted, or the date the sales agent's license is revoked or otherwise terminated by the Superintendent, whichever occurs first.

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Amended at 36 Ill. Reg. 14356, effective September 14, 2012

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