A. A person shall not establish, operate, advertise or promote a pyramid promotional scheme.

Terms Used In Arizona Laws 44-1735

  • Compensation: includes a payment based on a sale or distribution made to a person who either is a participant in a pyramid promotional scheme or has the right to become a participant upon payment. See Arizona Laws 44-1731
  • Consideration: means the payment of cash or the purchase of goods, services or intangible property but does not include:

    (a) The purchase of goods or services furnished at cost to be used in making sales and not for resale. See Arizona Laws 44-1731

  • Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
  • Person: means an individual, partnership, corporation, association, or any other entity of whatever kind or nature. See Arizona Laws 44-1691
  • Pyramid promotional scheme: means any plan or operation by which a participant gives consideration for the opportunity to receive compensation which is derived primarily from any person's introduction of other persons into participation in the plan or operation rather than from the sale of goods, services or intangible property by the participant or other persons introduced into the plan or operation. See Arizona Laws 44-1731

B. A limitation as to the number of persons who may participate or the presence of additional conditions affecting eligibility for the opportunity to receive compensation under the plan or operation does not change the identity of the scheme as a pyramid promotional scheme nor is it a defense under this article that a participant, on giving consideration, obtains any goods, services or intangible property in addition to the right to receive compensation.

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