Question 1

What is Donation Plan MLM?

Accepted Answer

Donation Plan MLM (also called Helping Plan or Gift Plan) is a peer-to-peer donation structure where members make donations to other members and receive donations in return based on their position in the network. Members donate to upline members and receive donations from new joiners. It operates on the principle of mutual help rather than traditional product sales or investment returns.

Question 2

How does Donation MLM plan work?

Accepted Answer

New member joins by making a donation (e.g., ₹5,000 to ₹1,00,000) to existing members as per plan structure. Common structures: Binary (donate to 2 uplines), Matrix (donate to multiple uplines in matrix positions), Board (donate to board head before advancing). As new members join below you, you receive donations. The cycle continues with members advancing through levels/boards receiving larger donations. No products involved - pure peer-to-peer fund transfer.

Question 3

Is Donation Plan MLM legal in India?

Accepted Answer

EXTREMELY HIGH LEGAL RISK: Donation MLM plans are HIGHLY LIKELY to be illegal in India under Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Critical issues: No product/service exchange (pure money circulation), Relies entirely on recruitment for sustainability, Classified as "money chain" or pyramid scheme, Many such schemes have been shut down with promoters arrested, RBI and police actively target such schemes. Legal requirements if attempting: Must have genuine charitable purpose registered under 80G/12A, Transparent operations with full disclosure, Cannot promise guaranteed returns, Must comply with Foreign Contribution Regulation Act (FCRA) if applicable. STRONG LEGAL ADVICE: DO NOT launch without comprehensive legal opinion.

Question 4

What are the severe risks of Donation MLM?

Accepted Answer

CRITICAL RISKS - HIGHEST CATEGORY: Near-certain classification as illegal money circulation scheme, Criminal prosecution under Prize Chits Act, Company shutdown and fund seizure by authorities, Loss of all member funds, Severe reputation damage and social consequences, Bank account freezing, GST/Income Tax notices, Civil and criminal liability for promoters and even participants, Media exposure as "scam", Difficulty in legal defense due to lack of products/services. Most donation MLMs collapse within 6-18 months. Early members may profit but later joiners lose everything.

Question 5

Why do Donation MLM plans inevitably fail?

Accepted Answer

Mathematical impossibility of sustainability: Exponential growth requirement (each level needs 2x more people than previous), Market saturation (limited pool of willing participants), No value creation (just money redistribution), Early member advantage (late joiners subsidize early ones), Negative publicity killing recruitment, Regulatory action shutting operation. Example: Binary donation plan needs 1,024 members at level 10, 1,048,576 at level 20 - impossible to sustain. When recruitment slows, system collapses and majority lose money.

Question 6

Can Donation MLM be made legal by calling it "help" or "gift"?

Accepted Answer

NO. Changing terminology does NOT make it legal. Courts and authorities look at substance, not labels: If money circulates purely based on recruitment = illegal, Calling donations "gifts" or "help" = still illegal money circulation, Using terms like "crowdfunding" or "peer help" = not legal protection, Having member agreements saying "voluntary" = does not exempt from law. Indian courts have repeatedly ruled that money circulation schemes are illegal regardless of what they call themselves. Only genuine charitable organizations registered under appropriate acts can accept donations.

Question 7

What happens to Donation MLM software after company shutdown?

Accepted Answer

When authorities shut down donation MLM (which is common): All funds in system may be seized, Software becomes evidence in criminal case, Database can be used to trace participants, Members may be called for investigation, No refunds typically possible, Promoters face criminal charges, Hosting providers may suspend services, Bank accounts frozen. We provide software, but CANNOT guarantee: Legal safety of business model, Continuation of operations, Protection from legal action, Recovery of development costs. Consider this a HIGH-RISK investment.

Question 8

Are there any legal alternatives to Donation MLM?

Accepted Answer

If you want to help people financially, consider LEGAL alternatives: Genuine product-based MLM (health, beauty, utilities), Microfinance or NBFC model (with RBI license), Registered cooperative society, Crowdfunding platform (with SEBI compliance), Affiliate marketing program, Profit-sharing business with real operations, Registered charity (80G certified) for actual social work. These require real business operations but are sustainable and legal.

Question 9

Why does EifaSoft develop Donation MLM software if it is risky?

Accepted Answer

We provide software development services - clients are responsible for legal compliance. However, we: Provide strong legal warnings about risks, Recommend legal consultation before launch, Include compliance features (audit trail, documentation), Advise against launching without legal clearance, Share information about legal alternatives. Final decision is client's responsibility. We do NOT guarantee: Legal safety of business model, Success or sustainability, Protection from regulatory action. By proceeding, client accepts full legal responsibility.

Question 10

How much does Donation Plan MLM software cost?

Accepted Answer

Donation Plan MLM software development starts from ₹4,00,000 for basic features including donation tracking, member matching, fund distribution, and compliance features. Advanced features like payment gateway integration, mobile apps, and automation can cost ₹6,00,000 to ₹15,00,000. Legal consultation (MANDATORY) costs additional ₹3-10 lakhs. Note: Given high shutdown risk, consider this a HIGH-RISK investment that may not provide ROI if authorities shut down operations.

Donation Plan MLM Software

🚨 CRITICAL LEGAL WARNING - EXTREMELY HIGH RISK 🚨

What is Donation Plan MLM?

How Donation MLM Works

Join with Donation

Receive Donations

Level Advancement

Cycle Continues

Example: Binary Donation Structure

Why Donation MLM Plans Always Fail

Exponential Growth Required

Market Saturation

No Value Creation

Legal Crackdown

Negative Publicity

Time Bomb

Donation MLM Software Features

Core Features

Compliance Features

Technical Features

Donation MLM Software Pricing

Basic

Professional

Enterprise

Frequently Asked Questions

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