Bonding requirements

Bonding requirements. Every dance studio which requires or receives advance payment from any customer in excess of $50 or more frequently than once each month shall maintain a bond for the benefit of any person who has entered into a contract for dance studio services with the dance studio, whether or not such contract is void under this Act, and is damaged by the failure of the studio to provide the services specified in the contract or by the failure of the studio to comply with this Act. The principal sum of the bond shall be 10% of the studio's gross income from the dance studio business in this State during the studio's last preceding fiscal year, except that the principal sum of the bond shall not be less than $10,000. The bond shall be issued by a bonding firm licensed to do business as such in this State, and shall be filed with the Secretary of State, together with a declaration under penalty of perjury signed by the owner of the studio stating the studio's gross income from the dance studio business in this State during the last preceding fiscal year. (b) In lieu of furnishing such bond a dance studio may deposit with the Secretary of State a cash deposit in a like amount. This cash deposit may be satisfied by any of the following: (1) certificates of deposit payable to the Secretary of State issued by banks doing business in this State and insured by the Federal Deposit Insurance Corporation; (2) investment certificates or share accounts assigned to the Secretary of State and issued by a savings and loan association doing business in this State and insured by the Federal Savings and Loan Insurance Corporation; (3) bearer bonds issued by the United States government or by this State; or (4) cash deposited with the Secretary of State. (c) No dance studio shall engage in business in this State while it is not in compliance with the provisions of this Section. (Source: P.A. 82-346.)