“Unfortunately, there is no rules & regulation for MLM in india. If any dispute arise, it comes under The Prize,Chits and Money Circulation Schemes[Banning Act] 1978 [No. 43 of 1978] ”
Any Multi Level Marketing (MLM) agencies for consumer goods and services who are actually mobilizing large amounts of deposits from the public with promise of high returns, are illegal. Any pyramic schemes are banned.
A company which is selling product via Direct Selling Concept and has no committement of return high profit without working is considered Legal MLM Company.
Few things you may know about MLM legals: Product
MLM is way of selling your product. So any organisation which using this method must have a own products or services. Your Produce price must be compatible with market or has some value. For example, you can sale your own suitlength brand in Rs.1000/- to Rs.10,000 depend on quality but you can't sale an accidental Insurance in Rs.1000/- or more because price accident insurance is Rs.70/- to Rs.400/- in market.
Billing
Because you are selling product, you must have invoice or billing system. Every sale should have bill or invoice either it is online or office billing system.
Commission Concept ( No high return committement)
Your commission concept or plan must be cleared and must depend of sale volumn. Either it is binary, step, matrix, generation, board or whatever plan should not showing without working commission.
Refund Policy
If posible, Add refund policy in your MLM Concept. It may time period like 1 day, 2 days, 7 days or whatever depend on you plan
Clear Term & Conditions
You must have clear terms & conditions. There should not be any thing hidden. Like about your product, commission concept, or renewal fees
No Money Circulation
Money Circulation is totally banned. All investment or growth plan are illegal either it is product based or service based.In your organization, there should not be any Money Circulation activities.
Govt. Taxes & Libilities
You must follow all govt. rules and regualtion of company and must deposit all Govt. libilities in time. You should follow TDS or Sales Tax rules.
Proper Registration
Registration form with terms & condition must be there either online or printed with proper signing. Your are not bound to give a copy of registion form to customer.
Distributorship
If posible, make Distributorship cost free. It may free distributorship, so nobody claim for distributorship amount or fee.
