1. Is your program a person, firm, corporation or other business entity?
2. which

a. sells;
b. distributes; or
c. supplies

3. for consideration
4. goods or services
5. through independent agents, contractors, or distributors
6. at different levels
7. participants may recruit other participants
8. compensation to participants is paid as a result of

a. the sale of such goods or services; or
b. the recruitment, actions or performances of other participants.

Whether a program is a legitimate multilevel marketing plan or an illegal pyramid depends principally on: (1) the method by which the products or services are sold; and (2) the manner in which participants are compensated. Essentially, if a marketing plan compensates participants for sales by their ‘enrollees’, ‘recruits’, and/ their downline enrollees or recruits, that plan is a multilevel. If a program compensates participants directly or indirectly, merely for the introductionor enrollment of other participants into the program, it is a pyramid.