MLMAttorney’s most requested video of the month: What Is the U.S. and International Trend in Recognizing the Validity of Personal Use by Distributors in
Pyramid Cases?

In short, is it legal to motivate distributors to buy products in order for them to qualify for the compensation plan rewards as opposed to purchasing product/services for their own personal use or for resale? This question greatly impacts direct selling companies and their owners/executives. Read the recent Burnlounge decision on our website.

In the last 10 years, distributor personal use, as a legitimate end-destination for product/service has been increasingly recognized by courts, legislatures and regulators. In 2013 and 2014, two European Union tribunals; now counting more than a dozen U.S. states have amended MLM statutes. In 2004, an FTC advisory opinion applauded efficiencies of MLM “buying clubs.” Even the most recent U.S. Ninth Circuit Court of Appeals decision, BurnLounge, recognized personal use purchases that were not merely incidental to the business opportunity. The emerging legal standard, legitimate vs. pyramid, is not the existence of personal use, but rather, whether the predominant motivation for distributor expenditure is to qualify for reward in the MLM program as opposed to purchase for personal use or resale.

Watch the video for a detailed explanation by Jeff Babener, Editor of MLMLegal.com. View all of our new videos and more on our new and improved website: MLMLegal.com!

MLMLegal.com is bustling with educational content for direct sellers and startup/existing MLM companies! Be sure to visit us often!

If you are interested in attending the Starting and Running the Successful MLM Company conference visit our conference page, view our speaker list, or get more details. All executives/owners of direct selling companies are welcome to attend. Call 800-231-2162 to register.

Our next Starting and Running the Successful MLM Company Conference takes place May 20, 2016 in Las Vegas. View our conference flyer and speaker list online. Participate in our Innovation Campaign for your chance to receive TWO FREE TICKETS to attend our next conference.

If you’re reading this blog post and the conference dates above have passed, check our website for the current conference dates.

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