How to Register a Multi-Level Marketing Business — 500,000,000 won Capital, Consumer Damage Compensation Insurance and the 35% Sponsorship Allowance Cap

Procedure

1. 1. Check disqualification grounds and capital

   Confirm that the representative, officers and controlling shareholders do not fall under the disqualification grounds of Article 14 (adult guardianship, bankruptcy without reinstatement, less than 5 years since completing a prison sentence for violating this Act, less than 5 years since cancellation of registration, etc.). Capital must be at least 500,000,000 won; any capital impairment is deducted and statutory reserves are added (Enforcement Decree Article 21).

2. 2. Conclude a consumer damage compensation contract

   Before registering, you must conclude one of the following: an insurance contract for consumer damage compensation, a debt payment guarantee contract, or a mutual aid contract with a mutual aid association established under Article 38 (Article 37(1)). Proof of the contract is a required attachment to the registration application.

3. 3. Prepare sponsorship allowance criteria and sales method documents

   Total sponsorship allowances may not exceed 35/100 of the total price (including VAT) of goods supplied to distributors, calculated on a one-year basis (Article 20(3)). Criteria that pay allowances differently on condition of recruiting a certain number of downline distributors are prohibited (Article 20(5)), and any burden imposed on distributors as a condition of registration or maintaining status may not exceed 50,000 won per year (Article 22(1); Enforcement Decree Article 29).

4. 4. Submit the application and receive the registration certificate

   Attach proof of capital, proof of the insurance or mutual aid contract, the sponsorship allowance criteria, the sales method documents and a document stating business days to the registration application on Form No. 7 (Enforcement Rule Article 11). The officer checks the corporate register and business registration certificate through shared administrative information, and once registered, a certificate on Form No. 8 is issued.

5. 5. Report changes, suspension or closure after registration

   If the trade name, address, representative, capital, insurance contract or sponsorship allowance criteria change, you must file a change report; the authority must notify acceptance within 10 days, and if it does not, the report is deemed accepted on the day after the period ends (Article 13(2), (4) and (5)). Suspension, closure and resumption of business must also be reported.

Required documents

• Multi-level marketing business registration application (Enforcement Rule of the Act on Door-to-Door Sales, Etc., Form No. 7)
• Document proving capital of at least 500,000,000 won
• Proof of a consumer damage compensation contract (insurance contract, debt payment guarantee contract or mutual aid contract)
• Document on the criteria for calculating and paying sponsorship allowances
• Document on sales methods, including inventory management and payment of sponsorship allowances
• Document stating the company's business days
• Corporate register certificate and business registration certificate (attach if you do not consent to verification through shared administrative information)

Fees

There is no fee for the registration application. Our office fee starts from the amount shown above and may vary depending on the items handled, the sponsorship allowance structure and the volume of sales method documents; we will give you an exact quote after reviewing your documents.

See fees and official charges for this service →

Legal basis and review date

• Act on Door-to-Door Sales, Etc., Article 13
• Act on Door-to-Door Sales, Etc., Article 14
• Act on Door-to-Door Sales, Etc., Article 20
• Act on Door-to-Door Sales, Etc., Article 22
• Act on Door-to-Door Sales, Etc., Article 37
• Act on Door-to-Door Sales, Etc., Article 58
• Enforcement Decree of the Act on Door-to-Door Sales, Etc., Articles 21 and 29
• Enforcement Rule of the Act on Door-to-Door Sales, Etc., Article 11 and Form No. 7

Checked against the statutes on 2026-10-23

Statutes and public notices change, so each case needs to be checked individually. Statute titles are given in English for reference. The Korean statutes are the authoritative text.

Check these first

• Because capital impairment is deducted, capital of 500,000,000 won on the books may still fall short of the standard.
• Changing the sponsorship allowance criteria must follow the procedure set by Presidential Decree (Article 20(2)), and the changed criteria are subject to a change report.

Frequently asked questions