What is Multi-Level Marketing Company (MLM Company)?


MLM (Multi-level marketing company) is a marketing promotional strategy in which a sales person sells the products or services for particular MLM business and recruits new sales promoters under his/ her downline to further sales of products and services. this is a system of marketing in which a hierarchal pattern is followed where The sales promoters are organized in a pyramid structure. The aim of salesman is just not to sell the product, but also to lure some more people to carry on the chain of selling the product further, and the chain goes on and on. Here the profits of the initial salesperson continuously increase as the chain grows on. This is also known as multi-level marketing, network marketing, matrix marketing, etc.


Guidelines of MLM Company


Marketing or Direct selling is a process where the products and services are being traded outside a retail establishment. Due to the unavailability of the physical store, it is obvious to have doubts about the quality supplied as well as the authenticity of the product sold. Therefore, to keep a watch on such businesses, some exclusive rules and regulations have been formulated, in the constitution with the appropriate competent authority. Since this is an individual matter of the state, these can vary from state to state.


Conditions for establishing Direct Selling Entities:


• The rules applicable to a Direct Selling Entities are quite different to those applicable to a private firm, yet they apply to the same extend.
• The Direct Selling Entity must have at least one bank account with a nationalised bank.
• Participation Deed or Memorandum of Association should be signed between the participating entities and it should clearly mention the nature of the business.
• The Entity must agree to pay the incentives at the defined rate at within the agreed time period. • The company website must contain the names and identification numbers of their authorised direct sellers.
• Should have a dedicated cell for consumers where the issues of the consumers must be resolved within 7 working days.
• Company website must have a space where consumers can register their complains.


Advantages of MLM Company


1. Cost-effective strategy: Network marketing is an easy and cost-effective way of marketing the manufacturer products without any expenses in the advertisement, because the products are standardized and have good quality. The customer’s mouth publicity plays an important role in this.

2. Practice makes you perfect: in this world, there is no school or courses taught you all the business strategy that actually depends on the existing environment and economy. No one defines you the perfect way on which you run and get all the targets. MLM or Network marketing would be the best option for anyone to get experience and practical knowledge about the market with a low-cost start-up.

3. Flexibility: MLM or network marketing business is a perfect choice for those who are fed up with the regular 9-5 job and wants a change, a person who wants to earn more and anyone else who wanted to do some job to use their free time and gain the financial independence. The joiners have their own work flexibility in hours, place and the sources.

4. Self-esteem: MLM industry is a leading world economy with a large MLM Company network. This industry not only gives you financial and time freedom but also encourages people through developing communication, management and leadership skills. You start to believe in yourself due to financial independence.

5. Tax advantages: MLM business is done by the small entrepreneur who set up and produced the product at their home in a small quantity. And now in a large group of the network marketing company, the most of margin is distributed into the downline that’s why they get the tax advantages and a distributor also gets the benefits.

6. Potential income: in the MLM industry, your income fully depends on your efforts and work effectiveness. It is a new income stream for beginners or the job seekers. You can recruit more members as your downline or every recruitment and on their sales you will get the extra commission.

7. Work as owner: The network marketing industry has a large list of products that are trading. It’s all depends on you that which product you choose to sell and from which brand, the target audience, the way to deal with potential leads, the mentors and the downline.

8. Modernization: Traditional selling of network marketing products is going to be very time taking and less market coverage. But nowadays due to social media and the internet, you can target a large number of audiences and answer their all queries. This is going to be a big market on social media and increasing the chances of the sale.


Rietway Consultants MLM Company Package


The Services which are included in our package are as Follows:
✅ Digital Signatures
✅ DIN of Directors
✅Filing of Spice form
✅Issue of Incorporation Certificate along with PAN and TAN
✅Memorandum of Association
✅Articles of Association
✅Provisional PF ESI Registration
✅GST Registration
✅MSME Registration


Steps to Start a New MLM Company


1. Incorporate a New private Limited Company: New Direct Selling Company in India should start its business preferably in the format of Private Limited or Public Limited Company
2.Go through Guidelines: New Direct Selling Company in India should starts its business preferably in the format of Private Limited or Public Limited Company.
3. Take all the needed registrations: Guidelines by MCA states that One should start a New Direct Selling Company after taking some necessary registrations.
4. Build a Plan and Software: MLM business mainly depends on the Plan, Product and Software. This is the time you work on all these three points.
5.File Undertaking to MCA: Direct Selling Entity have to file an undertaking to the Ministry of Consumer Affairs within 90 days of start of business.
6.Work for the Business Growth: You are all set, Just focus on the business and start developing your network.


Documents Required for Private Company Incorporation


1. Pan Card of all Directors and Subscribers
2. Identity Proof i.e. Voter Id Card/ Driving License/ Aadhar Card/ Passport of all Directors and Subscribers
3. Address Proof i.e. Bank Statement, Mobile bill, Telephone bill of all Directors and Subscribers
4. Passport Size Photographs of all Directors and Subscribers
5. Current Electric Bill/ Utility Bill as Registered Office Proof
6. Rent Agreement if Applicable


FAQ on MLM Company Incorporation


Q1. Can one work for one or more MLM company over a single period of time?
Majority of the MLM companies never say YES to work for more than one at a time. This not just violates the company policies but also the product selling tactics will open up for other companies, especially the competitors. Even though they all are following a somewhat similar model of marketing or compensation plan, tactics differ the most. Most of them add up their rules and make the plan flexible to work with necessary changes or customization. Hence distributors are mostly allowed to work for one Distribution Company and avoid the chances of the disclosure. Independent distributors might be allowed to take up the distribution of products from multiple MLM companies under their own risks.

Q2. How to make money through MLM business?
You can earn a good amount when any personal sale happens and you also earn a commission when any sale happens through your downline or team members. The commission rate depends upon the plan followed by the organization. It is always some percentage of the sale happened.

Q3 How to recruit new members in the MLM business?
In MLM business, you can recruit new members either from family or friends by explaining about the product and the business. You can explain the benefits of the business by using the company manual, short videos etc.

Q4 What type of products are used for this business?
MLM business mainly concentrates on the products which are consumable. Consumable products involve healthcare, beauty products, nutritional products etc. These types of products will be used by the customers or distributors so they come up with new order for the product.

Q5 How to promote the MLM products in network marketing?
As an MLM distributor, to promote the MLM products, you can keep in contact with your downlines, family, friends, etc. Keep regular meeting with your downlines to promote the MLM products, send e-mails to the customers in contact, create a social media group to promote the MLM produce, conduct a party or seminar to show your product demo and MLM presentation.

Q6 How to make money through MLM business?
You can earn a good amount when any personal sale happens and you also earn a commission when any sale happens through your downline or team members. The commission rate depends upon the plan followed by the organization. It is always some percentage of the sale happened.

Q7 How to recruit new members in the MLM business?
In MLM business, you can recruit new members either from family or friends by explaining about the product and the business. You can explain the benefits of the business by using the company manual, short videos etc.

Q8 What type of products are used for this business?
MLM business mainly concentrates on the products which are consumable. Consumable products involve healthcare, beauty products, nutritional products etc. These types of products will be used by the customers or distributors so they come up with new order for the product.

Q9 How to promote the MLM products in network marketing?
As an MLM distributor, to promote the MLM products, you can keep in contact with your downlines, family, friends, etc. Keep regular meeting with your downlines to promote the MLM products, send e-mails to the customers in contact, create a social media group to promote the MLM produce, conduct a party or seminar to show your product demo and MLM presentation.