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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 90171
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I want to start a local / national / international network

Resolved Question:

I want to start a local / national / international network where members meet in their local towns and cities for free. Members will have the opportunity to upgrade to paid membership with added online facilities and benefits for a regular monthly membership fee - (deducted automatically as a subscription via PayPal), which will then be distributed on a one-tier affiliate commission basis. Is this legal? What are the guidelines?
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.
I am sorry what do you mean what are the guidelines? This is a major undertaking something like match.com or the other online social sites and it is a major operation, so you have to be a bit more specific as to what you want to know as there are many different things you need to do and disclaimers and terms of services you need to have. Thus you need to narrow this down as we cannot possibly answer every single detail as that is beyond the scope of this service.
Customer: replied 1 year ago.

Thank you for the reply.


 


I know that this is a large undertaking with disclaimers, etc. But that is not my question.


 


My question is specifically: Is it legal to split a member's automatic monthly subscription fee so that a portion is distributed as an affiliate commission to the person who introduced the member?


 


The second part of my question, is also related to this. Where can I look up the legal guidelines governing the use of membership fees for affiliate commission? Since ignorance of the law is apparently not a valid defense, there must be a way for ordinary folk like us to look up the guidelines?


 


 

Expert:  Law Educator, Esq. replied 1 year ago.
This is a matter of actual written contract. This means that as long as your contract with your members states that the subscription is used in this manner, it is a legal contract. This is an incentive program to encourage members to sign up new members, so it is not a pyramid type scheme where people are told if they invest they will get money for others who invest, you are actually providing a service, so it is a right to contract for this type of service and payment plan.

There are no real legal guidelines, but you can read about Ponzi Schemes and Pyramid Schemes to see that what you are doing in offering a legitimate service would not fall under that type of scheme. Also see: Pyramid MLM Schemes.

Outside of something that is illegal, parties are free to contract as they see fit and here if they contract with you under the understanding they will receive payment for anyone they sign up as an incentive to get people to join the service it would be legal.

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You can always request me through my profile at http://www.justanswer.com/law/expert-paulmjd/ or beginning your question with “For PaulMJD…”

Customer: replied 1 year ago.

Thank you.


 


Your reply is both helpful and to the point.


 


Just what I needed.

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you. Please do not forget to click on excellent service feedback so I get credit for assisting you today.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 90171
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Law Educator, Esq. and 6 other Business Law Specialists are ready to help you

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