Government Rules For MLM Companies In India

To regulate the sale of goods and services outside of retail establishments otherwise known as “Direct Selling (Multi Level Marketing)” and to provide for protection of consumers who purchase goods and services from direct sellers, following guidelines are issued with the approval of the Competent Authority. These guidelines will come into force from the date of publication in official Gazette and will remain in force till an appropriate legislation is enacted for the said purpose. Check the Government Rules For MLM Companies In India below.

Indian Laws Against MLM System

In India, money circulation schemes are banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Section 2 (c) of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 defines a money circulation scheme as, any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions

Ways to Make your MLM Legal

Multilevel Marketing (MLM) concept is easy and widely used concept to make money fast. But this is against to law if you don;t follow some guidelines designed by Indian Government to secure consumer. Follow the below Legal guidelines and make your MLM legal and secure

Legal Registration

You must register your company legally either it is Pvt. Ltd., partnership firm, Sole Individual firm with all legal document like Incorporation Certificate etc.

Your Products

Your should sell those products that are useful to your clients
Your must have a own products or services that must be compatible with market or same other products.

Valid Documentation

You should have all legal documents like address proof, Pan Card, VAT, CST Certificate, Incorporation Certificate, etc.

No False Promises

Please Keep in Mind that, MLM is a concept of selling product, not money generation. So there is no scheme to return high income without any sale.

Valid Proof of Payment

You must give a receipt or bill or invoice to your member with authorised signature
You can also give online receipt in PDF format.

Return Policy

You should have a return policy for your products so that if your customers are not satisfied, you can refund their money back as per law.

Guidelines for MLM set by Rajasthan Government.

Guidelines for MLM set by Kerala Government.

Kerala Govt. announced some of the guidelines for MLM and become the first state of India which sets the guidelines for MLM Business

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