Do I need to register my direct sales/MLM company in all 50 states and is there a registration fee?
A number of states have multilevel distribution statutes that require registration. States such as Massachusetts, Georgia, Louisiana, Wyoming, and Montana require MLM registration. Other states with MLM statutes, such as Texas, Washington, Idaho, Indiana, South Dakota, etc., do not require actual registration.
No state approves MLMs and there are no advisory opinions to be sought in the U.S. on MLM. I.e. there is no approving of MLMs in all 50 states.
In regards to registering as “doing business,” states generally do not regard selling through independent sales representatives as “doing business,” requiring registration to do business. MLM companies resist this classification, which is typically physical presence-based where there are employees, offices, warehouses, or manufacturing facilities. Defer to your CPA and discuss this with them.
Long ago, the industry conceded “nexus” for sales/use tax because of in-state distributor activity in promoting product, recruiting, training, order taking, and driving customers to company websites. For more information, visit: http://www.mlmlegal.com/internetsales.html
In regards to registration fees, other than a registered agent fee of $50 in Louisiana there are no other fees. However, Montana is amended its filing, and possibly, there might soon be a nominal fee.
For additional information, contact a MLM attorney, such as Jeffrey Babener.
Visit MLMLegal.com and MLMAttorney.com for much more information about the direct selling industry.
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