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WiseOwl58, Attorney
Category: Business Law
Satisfied Customers: 3684
Experience:  Experienced business lawyer.
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Im starting a business where I want to have local salespeople

Resolved Question:

I'm starting a business where I want to have local salespeople of my clothing also act as recruiters/managers to bring in new reps. Nationwide.

I know its complex and costly to be mlm. So how many layers can I pay before I become mlm? Other options or pitfalls?
Submitted: 5 years ago.
Category: Business Law
Expert:  WiseOwl58 replied 5 years ago.
-Could you explain your situation a little more?

Exactly what do you mean by the phrase become mom?

Customer: replied 5 years ago.
Mlm. Multi level marketing. If I have a sales rep who brings in and manages people under her (friends selling product) I want her to make her direct sales commission plus a portion of the income of those under her goes to her for managing them.

Kind of how a general contractor gets a % of the subs.

Question is how many layers deep in managers can I have before it becomes a legal or admin nightmare. Is there a limit at which I need to register as an mlm/network marketer?
Expert:  WiseOwl58 replied 5 years ago.
Thanks for this additional information.

Unfortunately, it is not an easy test to determine if you are engaged in multilevel marketing, and not just a simple, oh it's three layers, so that is a yes, type of answer.

I encourage you to review this excellent article that I have used many times and it will give you much more insight into whether your business plan would be classified as multilevel marketing.

I trust this is useful for your purposes. Please press the green ACCEPT button. Thanks.
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