North Carolina Invention Developer Bond
The North Carolina Department of the Secretary of State (SOSNC) requires all invention developers to obtain a bond in the sum of at least five percent of the invention developer’s gross income, or twenty-five thousand dollars, whichever is greater. The bond serves as a financial protection for any client suffering damages due to the invention developers failure to uphold their performance of the contract.
PURCHASE INVENTION DEVELOPER BOND
Only at Jet are invention developers able to get bonded faster than anywhere else. This is achieved through our direct services to you - there are no third party agents or carriers you have to go through.
Why Is The Invention Developer Bond Required? Does It Apply To Me?
The North Carolina Department of the Secretary of State exists to support economic growth, promote public trust, fulfill statutory mandates by providing adequate infrastructure, and protecting citizens from misrepresentation and fraud. The invention developer bond ensures that any person suffering damages as a result of the invention developers inability to uphold their contract may pursue civil actions to recover their damages.
The North Carolina State statute has outlined individuals that as an individual, firm, partnership, or corporation, or an agent, employee, officer, partner, or independent contractor of one of those entities, that offers to perform invention development services for a customer.
Per § 66-209, the following are not be required to obtain the bond even if they assist the inventor:
- Government department or agency
- Schools
- Churches
- Charities
- Scientific Organizations
- North Carolina Licensed Attorney practicing law and not acting as a developer
How Is The Bond Pricing Determined?
The cost of the invention developer bond per monthly or annual terms will vary and will primarily be based on the bonding limit. The bonding limit is equal to the sum of at least five percent of the invention developer's gross income, or twenty-five thousand dollars, whichever amount is greater. Per § 66-214., the invention developer will have a 90-day period at the end of each fiscal year to adjust their bond amount while remaining within the requirements of the relevant state statutes.
With Jet this bond does require a review of the financial standing of the invention developer. It may be asked of the invention developer to provide supplemental paperwork such as business or personal financial statements as well as a copy of their standard contract.
Invention developers gain the advantage of having flexibility while working with Jet. Our monthly payment option would provide the invention developer with the ability to adjust their bond amount as they see fit within the scope of their business, while still remaining in compliance with the state statutes.
Can Jet File the Bond For Me?
Yes, we can! Jet will send the bond form directly to the State of North Carolina Department of the Secretary of State with any necessary information and signatures. Other agents and carriers would only offer this service after having charged additional fees.
You will receive a copy of the bond for your records upon purchase as well as a receipt. The bond form will be sent directly to the address stated below:
State of North Carolina Department of the Secretary of State
Post Office Box 29622
Raleigh, NC 27626
Can I Cancel My Bond? Will I Get A Refund?
The invention developer can choose to cancel their bond at any moment, given that they have provided notice to the Surety and the North Carolina Secretary of State. The Secretary of State also reserves the right to terminate the bond at any time, except as to any liability already incurred by written notice of termination to the Surety.
Jet offers the advantage of providing a refund for your bond for any prepaid annual term that has unearned premium (unused bond time) available. Once the cancellation request has been made, Jet will calculate the available refund amount given the cancellation provision.
The cancellation provision for this bond lasts 60 days after the request of cancellation has been made. As an invention developer, you will still be covered by Jet’s services during the length of the cancellation provision.
How Does an Invention Developer Avoid Bond Claims?
Invention developers are required to adhere by the State Statutes which outline their expected operational duties as well as prohibited behaviors. An invention developer must abide by the contracts entered and include the following contractual information per § 66-213. to avoid any claims:
- Describe the acts or services that the invention developer is required to perform for the customer.
- Include terms and conditions of payment along with contract termination rights.
- Specify the amount of prototypes, models, or devices the invention developer is contracted to construct.
- Should there be an oral or written estimate of projected sales or earnings made by the invention developer, the contract shall state the estimated data.
- Date of completion regardless of any provisions that may cause to delay the expected date of completion.
- Include the requirement of the invention developer needing to maintain records or correspondences regarding the performance of the invention development services for at least 3 years after the expiration of the contract. Any relevant records must be made available to the customer at any time.
- State the name of the person or group seeking invention development services.
- State the invention developer’s primary business address and contact information of their agent in the state of North Carolina.
Any customer who has been injured by a violation of the invention developer may file a claim for reasons such as false or fraudulent statements, representations, omissions of material fact by an invention developer, or failure of required disclosures may file a claim.
Customers who choose to make claims against the invention developer may pursue civil actions which may include: invention developer court costs, attorney's fees, and the amount of actual damages sustained by the customer, which may be increased to an amount up to three times the damages sustained.
Additionally, the Attorney General has the ability to enforce the state statute to recover a civil penalty up to $25,000 for each violation of the article and may also seek equitable relief to restrain violations of the relevant state statute chapter. Should the invention developer not make the proper restitution to the aggrieved party a claim may be filed against the bond.
What Happens If I Get a Bond Claim?
In the event that the invention developer receives a claim on their bond, Jet will step in and provide the best defense possible. However, if the claim comes in after having been investigated and determined from the North Carolina Secretary of State, there may be little Jet can do.
Should the claim be found as valid, Jet will step in and pay the damages up to the bonding limit that the invention developer has set. Once Jet has provided the damage payout, the invention developer will be expected to responsibly pay Jet back for any amounts dispersed. The invention developer still remains responsible for their actions and the bond only acts as a form of credit.
How Does the Application Process Work With Jet?
With Jet, the application process is shortened to ensure that you are bonded quickly and efficiently. Our application only asks for necessary personal information in addition to any supplemental financial information to determine your financial stability.
How Can I Renew the Bond?
The invention developer bond can be renewed through a very simple process. The only action the invention developer needs to take is continue their payments if you have purchased your bond on monthly terms. As long as the monthly payments continue, the bond will be considered continuous until cancelled by the invention developer.
For bonds purchased on an annual basis, Jet will provide a renewal notice to the invention developer with plenty of time to send the renewal payment. If there is any additional action that Jet may need from you, beyond a simple payment, Jet will notify you immediately.
