Soon Kerala will become the first state to pass law on MLM industry in India. The bill on MLM will be presented in the assembly in coming session. All the aspects related to the control and the operations of MLM companies in Kerala has been discussed and same to be presented in the assembly during the next session.
The Bill will clearly distinguish MLM and Direct Selling companies and exclude the latter from the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.
Some time back, the ceo of Amway was arrested by Kerala authorities under PCMC act, and that caused lot of tension among other direct selling companies in India, some say, this might have triggered the formulation of the Bill.
The bill will eventually help direct selling companies from being charged under PCMC act.
The Bill was jointly drafted by industries secretary and along with representatives of home,law,commercial taxes and consumer affairs departments.
They recommended a constitution on mlm to regulate and same to be regulated by an authority in the state for the registration,control and supervision on MLM companies. The authority shall also have the same powers as are vested in a civil court under the code of civil procedures 1908 while trying a suit.
On the other hand, central government is already working with 7 member committee on a national level Bill to control the MLM business.