MARYLAND STATUATE LAW
MULTILEVEL DISTRIBUTION COMPANY
Sections 14-301 Md. Ann. Code
Sections 14-302 Md. Ann. Code
Sections 14-303 Md. Ann. Code
14-301. “Multilevel distribution company” defined.
In this subtitle, “multilevel distribution company” means a person who, for consideration, distributes goods or services through independent agents, contractors, or distributing at different levels of distribution which rates of pricing or discounting that differ from 1 level to another.
14-302 Repurchases required.
(a) In general. A multilevel distribution company may not require a participant in its marketing program to buy goods or services or pay any other consideration to participate in the marketing program unless the multilevel distribution company agrees to repurchase the goods:
(1) that are in resaleable condition; and
(2) that the participant has been unable to sell 3 months after receipt of the goods first ordered.
(b) Contracts of participation. A multilevel distribution company shall state in writing in each contract of participation in its marketing program that:
(1) a participant may cancel the contract for any reason with 3 months after the date of receipt of goods or services first ordered by written notice to the multilevel distribution company; and
(2) on cancellation, the multilevel distribution company shall repurchase the goods.
(c) Repurchase price. The repurchase price shall be at least 90% of the original price paid by the participant.
14-303 Representations of earnings.
A multilevel distribution company may not represent directly or indirectly that participants in its marketing program may or will earn a stated gross or net amount or represent in any way the past earnings of participants unless the stated gross amount, net amount, or past earnings:
(1) are those of substantial number of participants in the community or geographic area where the representation is made; and
(2) accurately reflect the average earnings of participants under circumstances similar to those of the participant or prospective participant to whom the representation is made.
Attorney General,
Securities Division,
200 St. Paul Place, 20th fl. Baltimore, MD 21202 Phone: 410-576-6360
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