According to the provisions of the MLM Ban:
Article 2:
MLM refers to the behavior that organizers or operators calculate and pay remuneration to the developed personnel based on their direct or indirect number of personnel or sales performance, or require the developed personnel to obtain the qualification to join on the condition of paying a certain fee, so as to seek illegal interests, disrupt economic order and affect social stability.
Article 7:
The following acts belong to pyramid schemes:
(1) Organizers or business operators, through the development of personnel, require the developed personnel to develop other personnel to join, and calculate and pay remuneration (including material rewards and other economic benefits, the same below) to the developed personnel on the basis of the number of personnel directly or indirectly developed, so as to seek illegal benefits.
(2) Organizers or business operators require the developed personnel to pay or pay in disguised form by means of subscribing for commodities through the development personnel. , 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.
In the MLM Prohibition Ordinance, the concept of hierarchical relationship has been repeatedly mentioned. The formation of hierarchical relations according to certain laws is only a phenomenon in many pyramid schemes, and it is only possible to be suspected of pyramid schemes if it is related to illegal possession of other people's property.
2. Companies legally registered in China can be inquired on the websites of State Administration for Industry and Commerce, Local Administration for Industry and Commerce, Credit Network and Kaixinbao. Many aspects of MLM company are very close to direct selling companies. The difference is that legitimate direct selling companies have direct selling licenses. If not, then it can be determined that this is pyramid selling and it is illegal.
Extended data:
MLM originated in the United States in the late World War II, formed in postwar Japan and developed in China. MLM training materials are not only extremely inflammatory and deceptive, but also have many psychological factors, which are very tempting and deceptive.
In foreign countries, pyramid selling and direct selling are the same meaning, that is, there is only one concept of pyramid selling abroad. The main idea of foreign MLM is: driven by the word-of-mouth generated by customers' use of products, let customers help distributors promote products and share some profits, that is, customers spread sales. This is two concepts with domestic pyramid schemes.
Chinese pyramid selling is a fake company, a fictional product, and everything is empty. Just let you pull people's heads and extract a small commission from the entrance fee or franchise fee.
Or control personal freedom, confiscate property, so that you can't contact with the outside world, learn those MLM training materials every day, so that you can learn how to cheat, and then make a list, invite by phone or letter, show your cards and follow up until you pay the membership fee or franchise fee in various ways.
Chinese-style pyramid schemes focus on mental control, that is, after brainwashing through their pyramid schemes training, you can organize pyramid schemes spontaneously; Others will control your personal freedom, confiscate everything, and make you admit these lies through violence.
References:
Baidu Encyclopedia "Regulations on Prohibiting MLM"
References:
State Administration of Market Supervision Enterprise Information Inquiry