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How to Set Up a Multi Marketing Company (MLM) In India?

Narendra Kumar

| Updated: Jul 07, 2018 | Category: Company Registration, Startup

Multi Marketing Company

It is observed that a good percentage of the populations are trying to start their own business but because of the huge investment/ capital and other great manual effort required for the establishment, many are left behind. For now, every minute in India someone is looking for his or her own business to start.  Multi marketing company For them, MLM business set up is the right solution where one does not require any shop or showrooms. MLM business is such a business where the businessman is able to reach the thousands of customers/clients at a time spread all over the world with the help of his well-designed website. This website will tell the customers all about his products/ services offered by him. In fact, MLM is a new concept of the business of modern times.

MLM can be started by any person/ company or manufacturer or a trading company having some exclusive and unique/ distinctive and quality products or services for marketing and wants to tap worldwide customers without setting up any shops or showrooms with little efforts and patience. The product to be marketed can be either physical or virtual in nature.

A good product and a well-planned strategy are very important for setting up MLM.

What are the Legal Provisions for Setting up a Multi-Level Marketing Company India?

There is no separate law as such for setting up a Multi-Level Network Marketing (MLM) Company in India. However, it was proposed in the Indian Parliament in 2005 but yet not became a law.

What is the process to set up a Multi-Level Marketing Company?

To set up MLM Company one must consider the following steps:

Firstly, it is advisable to form a Private Limited or Limited Company to set up a Multi Marketing Company in India which involves limited risk for promoters who are setting up a Multi-Level Marketing Company Business. Thus, the risk involved in the business will be limited to their share in the company.

Secondly, it is advised to apply for the IDSA (Indian Direct Selling Association) MemberShip. It’s not a government body but it’s a private body set up by Amway India (one of the reputed USA companies in MLM business) who is trying to govern all Direct Selling Companies in India with their problem and to stop unethical and illegal MLM companies and Multi-Level Network Marketing Business practice.

Thirdly, one should also apply for GST Registration/ Tan No/ pan no etc. for the company proposing to set up MLM business. Further, all necessary licenses and registration required for manufacture and selling the product must be obtained from the respective authorities. It is also necessary to appoint a good legal advisor and Chartered Accountants’ firm to create/ adopt rules, regulations and other legal documents for the company and further guide the company from time to time.

The MLM Company must own and develop an exclusive website showing all the content and information related to company written by its legal advisor to counter the legal laws of the Land. It is also advised to take the assistance of someone who has an experience of this to design or at least hires a consultant. The website is very important as it plays a very crucial role in this business. Even hiring other professionals to help may be considered, if it is a new line of business. Further, visiting MLM startup forums to connect with people and get leads to helpful resources is also beneficial for the beginners in this business. Arranging the seminars and get together functions regularly will help to boost the MLM business.

In coming time multi marketing company will become the prime source for establishing a business and in the next 10 to 15 years this number will increase multifold.

Pre-launch offers, monthly and permanent offers are also helpful to make a good appearance in the market. Mostly known useful MLM plans are Unit-Level Plan and Generation Plan.

Who Regulates such MLM Companies?

Multi-Level Marketing companies, Direct Selling Companies, Online Selling Companies do not fall under the purview of RBI. Activities of these companies fall under the regulatory/administrative domain of respective state government.

Some of the Top MLM Companies operating in India is narrated below:

Amway, Avon, Oriflame, Herbalife, Tupperware, Medicare, and RCM. Some of these companies are very big in terms of their turnover, asset size, and profit margin. Some of them are also listed in the stock exchanges overseas. This reflects the success achieved by them in MLM business.

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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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