Legislative regulation of MLM business in the USA

[mehadihasan123456]

Network marketing in the United States is recognized as a completely legal business model that is strictly regulated by laws to prevent fraudulent financial schemes and protect the rights of consumers and distributors.

The main body that controls the activities of MLM companies in the country is the Federal Trade Commission (FTC). Each state also has its own laws and anti-pyramid statutes for additional regulation.

Among the key rules that every network business in the USA must adhere to are the following:

1. The income of the company and its partners must be based on the bank data sale of real products to end consumers, and not on the recruitment of new participants.

2. An MLM project must have a buyback policy that allows distributors to return unsold products at a price of at least 90% of their original cost.

3. All information about products, marketing plan and average income level of partners must be transparent and truthful. FTC actively fights against misleading advertising statements.

4. The Company cannot force distributors to buy large volumes of products in order to receive bonuses or maintain their status.

MLM business must also be registered in the state where you plan to operate. To promote cosmetics, dietary supplements or other health products, you will also need the appropriate license.