LinkedIn Twitter Facebook RSS Feed

MLM Legal

MLM companies and independent contractors (distributors) must understand the local, national and international laws that regulate the MLM and direct selling industry. In the United States, the direct selling industry is regulated by Federal Trade Commission rulings that influence commission plans or income claims. The sale of products is also regulated for all industries such as the three day return rate. In international legal cases, national and local laws vary.

  • May 31, 2012

    Stock Plunge on Internal Consumption: Whose Fault?

    It is shame that, in one day, in May 2012, leading direct selling companies would see their stock and capitalization value shrink by billions of dollars.  And, all over a rather simple and reasonable investor question like, “what percentage of product is consumed personally by MLM distributors as oppos... Read more ›

  • February 4, 2012

    The FTC Final Business Opportunity Rule

    Although the FTC’s summary of the Rule explicitly states that it is not the intent of the Rule to apply to companies that offer opportunities in the channel of distribution alternatively referred to as MLM/Multilevel Marketing/Direct Selling/Network Marketing, the actual Rule seemingly covers many areas... Read more ›

  • May 6, 2011

    Multilevel Marketing Pyramids-“Lotteries”

    The following article is taken from the MLM Legal Primer . This article looks specifically at how lottery laws can be and are applied to MLM companies. Federal and state multilevel marketing and anti-pyramid statutes are components of a comprehensive consumer protection umbrella. These laws are designed t... Read more ›

  • December 27, 2010

    MLM Companies Training and Monthly Service Fees: Be Careful!

    I’m going to start this article with the conclusion: MLM training fees and monthly service fees, when used to beef up a company’s compensation plan, are usually an attempt to support an anemic business model operating with low margins. It’s not a disaster if you see these “pay to play” fees. However... Read more ›

  • December 9, 2010

    Get Your Hands Off My Downline !!!

      Following closely on the heels of this commandment would be "thou shalt not covet thy neighbor's downline," and "thou shalt not commingle downlines. If there is one problem that every MLM faces at one time or another, it is the raiding of the company's distributor force for another MLM by one of ... Read more ›

  • October 14, 2010

    Will the New FTC Guidelines Affect Your MLM Business?

    It's always good to avoid entanglements with the law, so here's some information to help you abide by the new revisions to the FTC Act in your MLM business. I found this testimonial on a website...have you seen others like these? This is a prime example of what the FTC is looking for! I want you to know ... Read more ›