Thaxton v. Virginia

When are local recruitment meetings operated by corporate entities?

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The court held that Koscot needed authorization to do business in the state because it in fact operated the recruitment meetings and not local distributors. Members of the Koscot board of directors attended and spoke at the meetings, they were operated according to a script authorized by Koscot, speakers identified themselves as acting on behalf of Koscot, and money was solicited that funded Koscot corporate programs. All of these elements combined to convince the court that the "Opportunity Meetings" were really operated by Koscot corporate using local independent distributors as speakers, and not the other way around as claimed by Koscot. Because Koscot operated the meetings, it violated state law by not first being authorized to do business in the state.

Case and case summary are also available online at: http://www.mlmlegal.com/legal-cases/Thaxton_v_Virginia.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 4th Circuit, Virginia | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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