These guidelines are meant to protect consumers and direct sellers by establishing a fair and transparent direct selling environment. Adhering to these ensures business legitimacy and long-term sustainability in the MLM industry.
Must be a registered Direct Selling Entity with applicable licenses such as Sales Tax/VAT, Income Tax, TDS, and others per local laws.
Direct Selling means selling products directly to end users through word of mouth, demos, or pamphlets. Delivery and pickup points are allowed for product logistics.
Should maintain a bank account with a nationalized bank. Business nature must be mentioned in MoA/Partnership Deed; if not, it must be updated within 2 months.
Must pay sales incentives at agreed rates and within the agreed time frame.
Company must display names and unique identification numbers of all authorized Direct Sellers on the official website.
Must have a consumer grievance cell with resolution turnaround of 7 days. Website should include a user-friendly complaint registration area.
Direct Sellers must apply using a prescribed format. A legal agreement should be signed upon appointment. Applicants must be eligible under the Indian Contract Act.
Each Direct Seller must be issued a Unique Identification Number before being authorized to operate.
No incentive or reward should be given for merely joining as a Direct Seller.
Paying incentives unrelated to sales volume, distributing expired or defective products, and running money circulation schemes are strictly prohibited under law.