Bill > HB1138

This bill modifies Missouri's laws regarding pyramid sales schemes by providing more detailed definitions and regulations. The bill expands definitions for key terms such as "bona fide inventory repurchase program", which is a process where a company buys back current and marketable inventory from salespeople when their business relationship ends, and "commercially reasonable terms", which means repurchasing inventory within 12 months at not less than 90% of the original cost. The legislation clarifies that a pyramid sales scheme is a plan where compensation is primarily derived from recruiting new participants rather than from selling actual goods or services. The bill requires companies to clearly describe their inventory repurchase programs in recruiting materials and contracts, and mandates that companies disclose which types of inventory are not eligible for repurchase. Importantly, the bill prohibits selling or attempting to sell participation in a pyramid sales scheme and provides protections for franchisees by requiring 90-day advance notice before franchise termination, except in cases of criminal misconduct, fraud, or bankruptcy. The overall aim is to provide more transparency and consumer protection in multi-level marketing and direct sales businesses.

Business and Industry

https://house.mo.gov/Bill.aspx?bill=HB1138&year=2025&code=R