LC-059 / Corporate / Public ledger

Multilevel marketing.

A business may reward distributors for sales through a network of recruits, if its compensation structure stays lawful.

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In ordinary words.

A business may reward distributors for sales through a network of recruits, if its compensation structure stays lawful.

In legal terms.

Legitimate multilevel marketing is distinct from prohibited pyramid schemes; regulators assess actual retail sales, incentives and misleading earnings representations.

Where it stops being legal.

Recruitment-driven payments and deceptive income claims can violate consumer-protection laws.

Legal authority / Start reading

FTC MLM guidance

Open cited reference ↗

General U.S.-focused information. Cases and statutes may have jurisdiction-specific exceptions. This citation may be a general primer; verify the governing primary authority. Not legal advice.

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