Examine before investing

Examine before investing

The government, or in this case the Ministry of Industry and
Trade, should draw up a bill on compulsory disclosure documents
for businesses included in the patter of business opportunities,
such as MLM, cooperation or yield-sharing, agencies,
distribution/dealers, licensing and so forth.

For example, a company adopting the pattern of
cooperation/yield-sharing, such as PT QSAR, should have been
obligated to have a disclosure document, something like a
business prospectus, which would have been distributed to
prospective investors interested in cooperating with him at the
earliest opportunity. After the prospective investor studied the
contents of the prospectus and indicated that he was interested
in investing, the cooperation agreement document would have been
given so that he could study it for a minimum of two weeks.

This business prospectus would contain information about,
among other things, the owners and the business experience of the
professionals in the said company, how long the company has been
doing business, the risks of business, corporate financial
statements, the rights and obligations of the parties involved in
the cooperation, the termination of the agreement and so forth.
It is through this prospectus that prospective investors are
expected to find out and study whether or not the company is bona
fide as well as being worthy of investment.

I don't think it is hard to draw up a bill concerning the
above. We can just study the law prevailing in the U.S. and then
adjust it to the situation and conditions of our country. At the
same time, the association of employers, the government and the
foundation of the consumers' institute need to continue to
"educate" capital owners so that they will be more careful and
prudent when choosing investments.

At the same time, the association of employers, the
government, foundations, consumers' institutions need to continue
to educate the community (capital owners) so that they are really
careful in choosing the right investment. In the franchise
business, for example, the International Franchising Association
(IFAS) always campaigns the motto "investigate before investing"
to prospective investors wishing to get involved in the franchise
business.

AMIR KARAMOY, Observer of Franchising and Multilevel Business,
Jakarta