PURPOSE: This rule describes positive working capital, as well as, the posting of bonds and letters of credit.

1. (1) An applicant or registered professional employer organization (PEO) must demonstrate positive working capital. This must be demonstrated in the financial audit that—

   1. (A) Was prepared in accordance with generally accepted accounting principles;
   2. (B) Was audited by an independent certified public accountant without qualification as to the ongoing concern status of the applicant or registered PEO;
   3. (C) Reflects positive working capital; and
   4. (D) Is based on adequate reserves for taxes, insurance, and incurred claims that are not paid.

2. (2) An applicant who does not have a positive working capital may provide a bond—

   1. (A) With a minimum market value equaling the deficiency plus one hundred thousand dollars ($100,000);
   2. (B) Held by a lender authorized to do business in the state of Missouri and found on https://treasurer.mo.gov/LinkedDepositProgr amParticipatingInstitutions/default.aspx;
   3. (C) Is payable to the Missouri secretary of state; and
   4. (D) States that the surety will provide the secretary written notice sixty (60) days prior to cancelling the bond.

3. (3) In the alternative, an applicant who does not have a positive working capital may provide a letter of credit with a minimum market value equaling the deficiency plus one hundred thousand dollars ($100,000) that—

   1. (A) Is irrevocable;
   2. (B) Is issued by a financial institution authorized to do business in the state of Missouri and which is financially responsible for the amount of the letter;
   3. (C) Does not require examination of the performance of the underlying transaction between the secretary and the applicant;
   4. (D) Is payable to the secretary on sight or within a reasonable period of time after presentation of all required documents; and
   5. (E) Does not include any condition that makes payment to the secretary contingent upon the consent of, or other actions by, the applicant or other party.

AUTHORITY: section 285.725, RSMo Supp. 2018.* Emergency rule filed Nov. 30, 2018, effective Dec. 10, 2018, expired June 7, 2019. Original rule filed Nov. 30, 2018, effective May 30, 2019. *Original authority: 285.725, RSMo 2018.