Business Start-Ups magazine, April 1999
Q: I've found a fantastic product with sole source
rights in the United States and Canada. I'm looking to set up a
direct (multilevel) marketing plan. Where do I get the necessary
information to properly and legally do so?
A: Michael Sheffield, president of Sheffield Resource
Network, a Tempe, Arizona, management consulting and product
sourcing company for the direct-selling industry, says start-up
steps and costs include registering with various states;
trademarking your business and/or product; buying or manufacturing
your products; maintaining inventory; designing packaging;
developing a distributor kit and materials; hiring a staff; and
advertising.
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Four states--Wyoming, Massachusetts, Louisiana and
Georgia--require multilevel companies to register prior to starting
operations, says Kevin Grimes, an attorney with Grimes & Reese
PLLC in Idaho Falls, Idaho. For details, contact the secretary of
state or the attorney general's office in those states.
If you plan to do business in more than one state, consult an
attorney about foreign corporation statutes--state laws that
require you to register as a foreign corporation if you do business
in a state outside the one in which you're incorporated. An
attorney can also tell you if you need to collect and remit sales
tax to the various states. Last but not least, you should have an
attorney or other qualified expert review your
distributor-compensation plan to ensure it's in order.
The following organizations can offer additional
information:
- Multi-Level Marketing International Association(http://www.mlmia.com) is a nonprofit
trade organization for the network-marketing industry. Call (949)
854-0484.
- Direct Selling Association(http://www.dsa.org) is a national trade
association for companies that manufacture and distribute goods and
services sold directly to consumers. Its Web site includes industry
facts and a code of ethics for the industry. Call (202)
293-5760.
Contact Source:
Grimes & Reese PLLC, (208) 524-0699,
http://www.mlmlaw.com