§ 40-3-106 — Additional restrictions in marketing programs

(a) No multilevel distribution company or participant in
its marketing program shall:
(i) Operate or, directly or indirectly, participate
in the operation of any multilevel marketing program wherein the
financial gains to the participants are primarily dependent upon
the continued, successive recruitment of other participants and
where sales to nonparticipants are not required as a condition
precedent to realization of the financial gains;
(ii) Offer to pay, pay or authorize the payment of
any finder's fee, bonus, refund, override, commission,
cross-commission, dividend or other consideration to any
participant in a multilevel marketing program solely for the
solicitation or recruitment of other participants therein;
(iii) Offer to pay, pay or authorize the payment of
any finder's fee, bonus, refund, override, commission,
cross-commission, dividend or other consideration to any
participant in a multilevel marketing program in connection with
the sale of any product or service unless the participant
performs a bona fide supervisory, distributive, selling or
soliciting function in the sale or delivery of the product or
services to the ultimate consumer; or
(iv) Offer to pay, pay or authorize the payment of
any finder's fee, bonus, refund, override, commission,
cross-commission, dividend or other consideration to any
participant:
(A) If payment thereof is or would be dependent
on the element of chance dominating over the skill or judgment
of the participant;
(B) If no amount of judgment or skill exercised
by the participant has any appreciable effect upon any finder's
fee, bonus, refund, override, commission, cross-commission,
dividend or other consideration which the participant may
receive; or
(C) If the participant is without that degree of
control over the operation of the plan as to enable him
substantially to affect the amount of finder's fee, bonus,
refund, override, commission, cross-commission, dividend or
other consideration which he may receive or be entitled to
receive.