Legal Question in Business Law in California

Please read comment below, is this a pyramid scheme?

If I sell the manuals referred to in this article below, is this a pyramid scheme?? I am getting conflicting answers. I am told that for it to be a pyramid scheme, I would have be profiting from the clients that my customers bring in. This does not happen, I only profit directly from the customers I bring in.

When we make a sale of the 12 Project Wealth Creation Manuals to a new customer, we make a one-time sale: a One-Year, One time Subscription to the Project, paid for and delivered in 12 monthly installments. (12 x $95 = $1,140 total.) We can never receive more money than this from any individual customer ever - no matter how well they may do in this business. As participants and individual business owners involved in the program, we do not (and cannot) profit financially from the sales our customers. Our success is not directly dependent on the level of their success. To make more money ourselves, we must SELL more products ourselves! It is as simple as that.


Asked on 3/07/05, 1:38 am

1 Answer from Attorneys
Jonas Grant Law Office of Jonas M. Grant, A.P.C.

Re: Please read comment below, is this a pyramid scheme?

Without more detailed info., it's hard to make a call either way, and your description isn't very enlightening (I believe, but am not sure, that you're saying the 'product' is not really much of a product at all, but rather an admissions fee to the scheme?), but it sounds, based on what you have provided, very much like a pyramid scheme, rather than a legitimate MLM or "network" marketing opporunity. To succeed in this business as I understand it, you have to recruit more members, rather than sell real, useful product(s)/service(s) at a fair price. If true, then that is a sure sign of a pyramid scheme, and you'd be well advised to steer clear.

http://en.wikipedia.org/wiki/Pyramid_scheme

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http://www.incorporatecalifornia.com

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Answered on 3/12/05, 1:51 am


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