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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118254
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I want to start a local / national / international network

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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?
I am sorry what do you mean what are the guidelines? This is a major undertaking something like 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 4 years 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?



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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There can also be a delay of an hour or more in between my answers because I may be helping other customers or taking a break.

You can always request me through my profile at or beginning your question with “For PaulMJD…”

Customer: replied 4 years ago.

Thank you.


Your reply is both helpful and to the point.


Just what I needed.

Thank you. Please do not forget to click on excellent service feedback so I get credit for assisting you today.
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