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Multi-level Marketing

A system for selling products in which participants get paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants.

Also known as a pyramid selling scheme, the system can be lucrative for those at the top: the first sellers.

In Canada, multi-level marketing plans are controlled under the Competition Act and is defined at §55 as:

"... a plan for the supply of a product whereby a participant in the plan receives compensation for the supply of the product to another participant in the plan who, in turn, receives compensation for the supply of the same or another product to other participants in the plan."

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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