MLM refers to the way that organizers or managers develop personnel, calculate and pay remuneration to the developed personnel according to the number of directly or indirectly developed personnel or sales performance, or require the developed personnel to obtain the qualification for joining on the condition of paying a certain fee. Its purpose is to seek illegal interests, disrupt economic order and affect social stability.

It is necessary to judge whether it belongs to pyramid selling from the legal provisions and specific operation methods. At the same time, you can query some information of the company on the national enterprise credit information network.

Article 7 of the MLM Regulations on Prohibiting MLM belongs to MLM:

(1) The organizer or operator, through the development of personnel, requires the developed personnel to develop other personnel to join, and calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed, so as to seek illegal benefits;

(2) The organizer or business operator, through the development personnel, requires the developed personnel to pay the fees or pay the fees in disguised form by subscribing for commodities, etc. , so as to obtain the qualification to join or develop other personnel to join and seek illegal interests;

(3) The organizer or business operator requires the developed personnel to develop other personnel to join, thus forming an online relationship, and calculating and paying online rewards according to the sales performance of offline personnel to seek illegal benefits.

The obvious characteristics of pyramid selling:

1, the price of MLM goods seriously deviates from the actual value of the goods themselves, some MLM goods have no use value and value at all, and the service items are purely fictitious;

2. The income obtained by participants is not from the reasonable profit of selling products or services, but from the fees paid by others when they join.