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Condition for Conduct of Direct Selling Business


Every Direct Selling entity shall comply with the following conditions:


1.   It shall be the owner, holder, licensee of a trademark, service mark or any other identification mark which identifies the entity with the goods to be sold or supplied or services to be rendered;

2.   It shall issue proper identity documents(s) to its Direct Sellers;

3.   It shall maintain proper records either manual or electronic of their business dealings, with complete details of their goods, services terms of contract, price, income plan, details of direct sellers, including but not limited enrolment, termination, active status, earnings etc;

  1. Every Direct Selling entity shall maintain a “Register of Direct Sellers” wherein relevant details of each enrolled Direct Seller shall be updated and maintained;
  2. he details of Direct Sellers shall include and not be limited to verified proof of address, proff of identity and PAN;

4.   It shall maintain proper and updated website with all relevant details of the entity, contact information, its management, products, product information, product quality certificate, price complete income plan, terms of contract with direct seller and complaint redressal mechanism for direct sellers and consumer complaints and should ensure that grievances are addressed within 45 days of making such complaints;

5.   It shall provide to all direct sellers their periodic account / information concerning, as applicable, sales, purchases, details of earnings, commissions, bonus and other relevant data, in accordance with agreement with the direct sellers. All financial dues shall be paid and any withholding made in a commercially reasonable manner.


6.   It shall monitor the value of the purchase of all its Direct Sellers / Distributors on a monthly basis and once the purchases value crosses the VAT threshold, it must intimate the Direct seller/ Distributor to pay the VAT;

7.   A Direct Selling entity shall not:

  1. Use misleading, deceptive or unfair recruiting practice, including misrepresentation of actual or potential sales or earnings, in their interaction with prospective or existing direct sellers;
  2. Make any factual representation to a prospective direct seller that cannot be verified or make any promise that cannot be fulfilled;
  3. Present any advantages of direct selling to any prospective direct seller in a false or deceptive manner;
  4. Make or cause, or permit to be made, any representation relating to its direct selling business, including remuneration system and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller which is false or misleading.
  5. Engage in , or cause pr permit, any conduct that is misleading or likely to mislead with regard to any material particulars relating to its direct selling business, including remuneration system and agreement between itself and the direct seller, or to the goods or services being sold by itself or by the direct seller;
  6. Use, or cause or permit to be used, fraud, coercion, harassment, or unconscionable or unlawful means in promoting its direct selling practice, including remuneration system and agreement between itself and the direct seller, or the goods or services being sold by itself or by the direct seller;
  7. Require its direct seller to provide any benefit, including entry fee and renewal fee or to purchase any sales demonstration equipment or material in order to participate in its direct selling operations;
  8. Provide any benefit to any person for the introduction or recruitment of one or more persons as direct sellers;
  9. Require the direct seller to pay any money by way minimum monthly subscription or renewal charges;

8.   Notwithstanding the distribution system adopted by a direct selling entity, the Direct Selling Entity shall be responsible for compliance of these Guidelines by any member of its network of direct selling, whether such member is appointed directly or indirectly by the Direct Selling Entity.




  • Mr. Arun Aggarwal
  • Legal Expert, Consultant, Software Analyst
  • Address: B-2/272,273 First Floor Sector-6 Rohini, New Delhi-110085 (India).
  • For further information on info@vistaneotech.com
  • Phone/Whatsapp/Viber/ Wechat : +91 9811190082
  • skype: arun.vistaneotech, QQI id: 973620192


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