MLM companies are the newest in the line of business, but they have been around for decades.
MLM is a business where participants buy products or services from companies or individuals.
In many cases, MLM offers no or minimal accountability, and it is a form of pyramid scheme.
The main benefit of a MLM scheme is the money it brings in to the participants.
These schemes are typically run by people from the same families, as the products or service are usually not in high demand.
MLMs also have a wide variety of incentives, from bonuses to promotions, which sometimes are given out based on results of an audit.
As per the MLM regulations, the product or service must be free, and not charge a fee.
A product or services must be in good standing and in line with MLM’s own rules.
To be eligible for a promotion, a product or product service must have a minimum of one-third of the product’s revenue, or a sales of over Rs 2 crore per annum, according to the MLMPregulations.
To attract the customers, an MLM has to be able to prove that it is profitable.
This can be achieved through an annual profit report, annual financial statements, company websites, advertisements and videos.
In some cases, the companies are required to provide detailed documents like accounting statements, tax returns and other data.
These are often not available to consumers, as they are classified as ‘restricted information’.
In the latest edition of MLM regulation, the National Green Tribunal has asked the government to issue an interim order for mandatory transparency in the industry.