Every state has adopted laws regulating MLM companies. Visit this page to look up MLM law in your state.read more »
MLM Law: Nevada State Laws
The Nevada consumer protection statutes contain a prohibition on the operation of pyramid distribution schemes. The Nevada law incorporates a standard definition of a pyramid scheme, defining such devices as any plan where a person gives consideration for the opportunity to receive in return consideration or other things of value; "for procuring or obtaining one or more additional persons to participate in the program, or for the opportunity to receive compensation of any kind when a person introduced to the program or plan by the participant procures or obtains a new participant in such a program."
"Compensation" for inducing others to join the program does not include payments "based on sales of goods or services to persons who are not participants in a pyramid promotional scheme or endless chain and who are not purchasing in order to participate in such a program.;".
"Consideration" is not defined in the Nevada law. Contracts made in Nevada "which have any part of the consideration given for the right to participate in a pyramid promotional scheme" are voidable by the participant. Nevada Revised Statutes §598.100 and 598.120.
Other Pages of Interest
MLM law in 50 states, IRS Publication 911, the MLM Textbook, as well as a comprehensive index of articles on the direct selling industry.read more »
Key Pages to Visit While You're Here
For Startup and Existing MLM Companies
Starting and Running the Successful MLM Company manual
The Best MLM Resource on the Web