New Delhi: The Consumer Protection Laws, 2021, have been notified by the Union government, and direct selling companies have been given 90 days to comply with the rules.

All goods and services bought or sold through direct selling, all direct selling companies offering goods and services to consumers in India, including a direct selling entity that is not established in India but offers goods or services to consumers, will be subject to the new rules of the Ministry of Consumer Affairs, Food and Public Distribution.

All direct selling companies and sellers are prohibited from promoting a pyramid scheme, enrolling anyone in such a scheme, or participating in such an arrangement in any way in the name of doing direct selling business, or participating in a money circulation scheme in the name of doing direct selling business, under the new rules.

The new rules require state governments to establish a mechanism to monitor and supervise the activities of direct sellers and direct selling entities, and they make certain requirements for direct selling entities mandatory, such as incorporation under the Companies Act, 2013, or registration as a partnership firm under the Partnership Act, 1932, or registration as a limited liability partnership under the Limited Liability Partnership Act, 2008.

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