Section 3 – Becoming an IBO
As Principal, Amway bears direct responsibility for the authorised conduct of its IBOs who very often have the privilege of conducting business in customers’ homes. Accordingly, this section says that Amway sets and maintains high standards for admittance and renewal of an IB and, in certain cases, can exclude potential or existing IBOs if their conduct or history so warrants that extreme action; it also says that an IBO is an independent contractor and is under no obligation to participate in the business; the degree of involvement is solely up to the IBO.
In response to the very restrictive legal requirements for gaining permanent residency or a working Visa to enter Australia or New Zealand, this section also notes that prospective IBOs who are not Permanent Residents of Australia must satisfy Amway’s requirements for non-resident IBOs in order to perform the functions involved in being an IBO in Australia or New Zealand.
3.1 IBO Application Form and Registration Pack: To become a duly authorised IBO capable of merchandising Amway Products and services and sponsoring other IBOs, an applicant must apply for authorisation from Amway by completing the IBO Application Form and possess an Amway Registration pack. The completed IBO Application must be submitted to Amway immediately, and accepted by Amway as authorised in accordance with the provisions of Rule 3.3. The application for appointment as an IBO shall be considered accepted by Amway upon receipt of an IBO’s registration, including their acceptance of these Rules of Conduct and the IBO application Terms and Conditions.
3.2 Partners – Long-Term Relationship: Two Individuals who are in a long term relationship together, upon acceptance by Amway, shall be authorised as one IB. A person whose partner is an authorised Amway IBO shall not be eligible to apply as an authorised IBO of another IB. A long term relationship includes, but is not limited to, de facto couples and husband and wife.
3.2.1 Amway may at its sole discretion terminate the IB if Amway is of the opinion (which opinion shall be final) that any act of the IBO and/or his/her partner (whether or not the partner is a registered partner) is found to be in contravention of any of the Rules of Conduct.
3.2.2 If two IBOs, each of whom owns and operates an IB in different or same Line of Sponsorship (neither of which is at the Platinum or above level), become married or enter into a long-term relationship together, one IB must be terminated. If either partner has attained the status of Platinum or above, then the partners may operate both IBs, each of which will, however, be operated in its original Line of Sponsorship. IBO must notify Amway as soon as possible.
3.2.3 Where IBOs are in a long-term relationship IB, if a partner resigns from Amway for any reason pursuant to the Rules of Conduct herein, Amway shall be entitled to terminate the IB of the remaining partner without assigning any reasons. Amway may however allow the remaining partner to continue operating the IB in which event the remaining spouse and resigning partner shall be subject to these Rules of Conduct and to such other terms and conditions which Amway may deem fit to impose.
3.3 Application Requirements: Without limiting Amway’s rights, to become an IBO or to renew authorisation as an IBO, an applicant:
3.3.1 Must be at least 18 years of age;
3.3.2 Must not, without written approval of Amway, already be an IBO. A former IBO may apply for authorisation as a new IBO, subject to Rule 6.3 and Rule 6.4;
3.3.3 Must not be married to, or in a long-term relationship with, a currently authorised Amway IBO;
3.3.4 Must not be incapable of managing his/her affairs by reason of mental or other condition (except where the IBO has granted power to another to act via an Enduring/Continuing Power of Attorney);
3.3.5 Must not be bankrupt or a party to any arrangement or composition with his/her creditors or any of them or own any property or assets the subject of receivership or official management;
3.3.6 Must not be currently suspended or disbarred from practicing his/her usual trade or profession by any trade or professional association, institute or society;
3.3.7 Must not be in gaol or confined to any other corrective institution;
3.3.8 Must not have been previously terminated by Amway as an IBO, Member or Client for breach of contract within Australia or New Zealand, or within another Amway affiliate;
3.3.9 Must comply with Rule 6.3 and 6.4 of these Rules of Conduct if the applicant previously operated under an IB that was terminated or expired (and has not been renewed);
3.3.10 In the case of a renewal application, must not have failed to rectify any remediable breach of these Rules or of the contract of which they form a part, within 14 days of written notice from Amway of such breach;
3.3.11 Resides within the country where the business is being registered, if this is a person’s first Amway Business in any market where Amway operates. The company retains the discretion to allow registration beyond the restriction;
3.3.12 Must nominate their IB outside of Australia or New Zealand as their International Sponsor, if they have an IB outside of Australia or New Zealand;
3.3.13 In the case of an application to Amway of Australia, must be an Australian citizen, or if not, must be the majority shareholder of an Australian incorporated or registered company or the holder of an entry permit under the Migration Act 1958, which is in force and which affords the holder Permanent Resident status in Australia and which has not been granted subject to a condition imposing restrictions on the applicant performing work (or work of a kind which would include work done by IBOs as IBOs) in Australia. If an IBO cannot satisfy the above, they must alternatively provide Amway with evidence that they satisfy the following criteria:
a) have an Australian Business Number (only required in the event that they are conducting their Amway Independent Business through a Limited Liability Company);
b) have an Australian bank account with an Australian resident bank; and
c) have appointed a Manager (who is an IBO) to manage the Australian Business, and have completed the non-resident Management Agreement form.
3.3.14 In the case of an application to Amway of New Zealand, must be a New Zealand citizen, or if not, must be the majority shareholder of a New Zealand incorporated or registered company, or the holder of an entry permit under the relevant migration laws which are in force and which affords the holder Permanent Resident status in New Zealand and which has not been granted subject to a condition imposing restrictions on the applicant performing work (or work of a kind which would include work done by IBOs as IBOs) in New Zealand. If an IBO cannot satisfy the above, they must alternatively provide Amway with evidence that they satisfy the following criteria:
(a) have an Inland Revenue Department Number;
(b) have a New Zealand bank account with a New Zealand resident bank; and
(c) have appointed a manager (who is an IBO) to manage the New Zealand Business and completed the non-resident Management Agreement form.
3.4 Acceptance or Rejection of IBO Application or renewal: Amway reserves the right to accept or reject any IBO Application. Likewise, Amway reserves the right to refuse any renewal request and can revoke the IB if an IBO’s activities have not been in accordance with the Rules of Conduct or if the IBO is not in Good Standing or has not complied with the requirements of Rule 3.3. The decision of Amway to accept or reject such application is not open to review by an arbitrator appointed pursuant to Section 11 of these Rules.
3.5 Individuals, Partnership, Companies, or Trustee: Amway IBs may be granted to individuals, limited liability companies, trustees or partnerships but in any instance the IBO shall consist of not more than two persons except where an IB qualifies at the Platinum IBO level when Amway may, upon application in writing, admit additional owners to the IB in circumstances where the sole or dominant purpose of such admittance is to facilitate the orderly transition of ownership or management of the business from one generation of IBOs to the next. The original owners of the IB shall nominate in writing to Amway from time to time, the two participants who will be recognised by Amway for the purpose of attendance at invitational functions.
3.5.1 Where Amway has approved the addition of further owners to an IB, Amway will, for purposes of acknowledgment of both past and future pin levels, recognise only the original owner or co-owners of the business whilst those original owners continue to be active in the business.
3.5.2 IBs are not granted to recreational clubs, schools or school support organisations, charitable organisations or church affiliate groups.
3.6 IBOs Operated through a Partnership: When the IB is operated as a partnership, the IBO will only be granted in the names of the individual partners, and not under any business or other name which the partners may use for trading purposes
3.7 IBOs Operated through a Limited Liability Company: An IBO may apply to Amway to operate the IB through a limited liability company, provided it complies with certain requirements and conditions as determined by Amway. To do so, the IBO’s obligations to Amway under these Rules and as an independent contractor of Amway must be guaranteed by the director and principal shareholders of the corporate IBO, on such terms and conditions as shall be reasonably required by Amway. The person signing the IBO Contract on behalf of a limited liability company must be an authorised representative of that limited liability company and must personally meet the qualifications set forth in Rule 3.3 above.
3.7.1 If an IBO is a limited liability company, Amway shall only recognise the two majority shareholders/ directors, specified and identified by Amway for award purposes, or such additional shareholders/directors as may be approved by Amway pursuant to Rule 3.5 and shall always describe them by their individual names and not the name of their company.
3.7.2 If an IBO is a limited liability company, only the two shareholders/directors identified and specified by Amway pursuant to Rule 3.7.1, or such additional shareholders/directors as may be approved by Amway pursuant to Rule 3.5, shall be engaged or involved in the day to day conduct and operation of the IB.
3.8 Operating as a Trustee: A person may become an IBO in his/her capacity as a trustee of a trust if the person complies with the requirements set forth in current official Amway-produced literature, and in particular:
3.8.1 Where the trustee is either a limited liability company which otherwise complies with Rules 3.5 and 3.7 or comprises not more than two individuals.
3.8.2 Where the trustee or its solicitor has provided to Amway a certificate, in a form approved by Amway, setting out such details as Amway may require, including: that the trustee is empowered by the Trust Deed constituting the trust to carry on an Amway Business; that the trustee has a right of indemnity against the assets of the trust, and there has been no waiver of that right of indemnity; and full details of the beneficiaries of the trust;
3.8.3 Where the trustee has acknowledged personal liability for the debts which will be incurred by the IBO and all acts, matters and things done in the course of the conduct of the IBO, and the IBO’s obligations to Amway under these Rules, and as an independent contractor of Amway; and
3.8.4 Where the trustee is a limited liability company, the IB’s obligations to Amway under these Rules and as an independent contractor of Amway shall have been guaranteed by the directors and the principal shareholders of the trustee on such terms and conditions as should be reasonably required by Amway.
3.9 Operating an IB on Trust: In the event where an IBO holds an IB on trust,
3.9.1 Amway shall only recognise the trustee, if an individual, or the two shareholders/ directors of a limited liability company trustee identified and specified by Amway, for award purposes, and shall always describe them by his/her individual names and not by the name of the trust, or of the limited liability company trustee; and
3.9.2 Only the trustee (where an individual) or the two shareholder/directors of a limited liability corporate trustee, identified and specified by Amway pursuant to Rule 3.9.1 shall be engaged or involved in the day to day conduct and operation of the IB.
3.10 Date of Authorisation: The date of authorisation as an Amway IBOs is when the IBO Application has been received and processed by Amway.
3.11 Term and Expiration: Unless the term is renewed in accordance with Rule 3.4 and Rule 3.12 of the Rules of Conduct and the Amway Business Policies, an IB expires or may be terminated in accordance with its terms. As specified in the IBO Contract, unless terminated earlier by an IBO in writing to Amway, or Amway, the IB shall expire on 31 December of the current year.
3.11.1 Buy-Back Rule: Upon expiration or voluntary termination of the IBO Contract, an IBO may apply to Amway to return unsold inventory of Amway Products that he/she has purchased within the past 12 months, provided such products are in new, unused and original condition. Amway will repurchase such products at the cost for which the IBO purchased such Amway Products from Amway, according to the existing policy. In the event that the IB is terminated for an IBO’s breach, Amway shall have discretion as to the repurchase of products under the Buy Back Rule.
3.12 Renewal: An IB may renew their authorisation and appointment as an IBO by agreeing to automatic renewal at the time of application, or if opted out, by selecting renewal online during the nominated period or by sending to Amway a completed Application for Renewal in the form prescribed by Amway from time to time, and by payment of the then current subscription fee. Renewal will be at the discretion of Amway provided the IBO is not in violation or breach of Amway’s Rules and Policies and terms of IBO Contract in any market. The IBO will have no claim against Amway arising out of or in respect of any non-renewal pursuant to this Rule.
3.12.1 If accepted by Amway, any extension of the term of IBO Contract and Amway’s Rules and Policies shall be effective from the date of renewal, 1 January, and concluding twelve months thereafter on 31 December. The terms of such renewal shall be the terms and conditions of the IBO Contract in effect at the time of renewal.
3.12.2 The renewal of an IBO’s IB for the forthcoming fiscal year will be effective only if and when the IBO receives from Amway confirmation that the renewal has been accepted for that forthcoming Amway fiscal year.
3.12.3 Without limiting Amway’s discretion to deny renewal of an IB, the following automatically disqualify an IBO from renewing of his/her IB:
a) The IBO was operating in a manner that was contrary to the reputation and interests of Amway;
b) The IBO did not comply with or is in breach of the IB within the 12 months preceding the period for which extension is sought; or
c) Failure to meet the requirements outlined in Rule 3.3 of these Rules of Conduct.
3.12.4 Should Amway decline or refuse to renew an IBO’s IB, the IB shall be terminated upon and by virtue of service by Amway upon the IBO of a notice to that effect, and the provisions of Rule 12.7 shall apply.
3.12.5 Late Applications for Renewal filed, with an appropriate late renewal subscription, after 31 December, but before the following 31 December, shall be filed with Amway. Amway will determine at its absolute discretion whether a late application should be accepted and whether previous sponsorship of other IBOs, Members or Clients should be maintained.
3.12.6 Unless Amway approves the late Application for Renewal pursuant to Rule 3.12.5, if an IBO fails to file an Application for Renewal, or fails to pay the renewal subscription fee by the due date, the IBO’s authorisation shall expire automatically on 31 December of the then current year.
3.13 Termination: An IBO may terminate the IB at any time by providing Amway with written notice of termination at Amway’s address. Amway may terminate the IB at any time by providing the IBO with written notice of termination at his/her specific address if he/she fails to comply with the Amway Business Policies, including the Amway Rules of Conduct, the Amway Sales and Marketing Plan and other policies maintained by Amway and which have been incorporated into the IBO Contract.
3.14 Invitations to Amway Events: Invitations for business seminars, incentive trips and other events organised by Amway will be issued or withheld at Amway’s absolute discretion.
3.14.1 To be eligible to qualify for an invitation to any event referred to in Rule 3.14, a person must have been an IBO for a minimum 6 months of the relevant qualifying period, and must continue to be a current IBO at the time of the invitation and attendance at the event.
3.15 No minimum requirement beyond registration pack: A sponsor shall not impose on a Prospect, nor any IBO, as a condition to receiving from the Sponsor assistance in the development of such person’s IB, such as:
3.15.1 Purchase any specified amount of products or services;
3.15.2 Maintain a specified minimum inventory;
3.15.3 Purchase any non-Amway produced “starter,” “decision,” or other “pack” or “kit”;
3.15.4 Purchase, or subscribe to any program, that includes literature, audios, books, audio-visual aids, access to websites or other materials;
3.15.5 Purchase tickets for and/or attend or participate in rallies, seminars, or other meetings; or
3.15.6 Sponsor a specific or minimum number or other IBOs.
3.16 Conspiracy; Inducement to breach: An IBO shall not conspire with any other person to breach or induce a breach of any Rules of Conduct or the Amway Business Policies or to induce or attempt to induce another IBO to breach any of the Rules of Conduct or the Amway Business Policies. Any such activity shall constitute a breach of the Rules of Conduct or the Amway Business Policies.
3.17 Exceeding Scope of Authorisation: An IBO shall not exceed the scope of authorisations granted pursuant to the IBO Contract. Any such activity shall constitute a breach of the IBO Contract.
3.18 Representations and Warranties: An IBO shall not make any false representation or statement to Amway, nor induce Amway to enter into an IBO Contract under false pretences, nor breach any representation or warranties implied in this contract or by law. Any such activity shall constitute a breach of the Rules of Conduct or the Amway Business Policies.
3.19 Multiple Breaches: It is a breach of the Rules of Conduct or the Amway Business Policies for an IBO to allow any breaches to remain uncorrected following notification from Amway of the existence of the same, or to have multiple simultaneous, serial or repeating breaches of the Rules of Conduct or the Amway Business Policies.
3.20 Circumvention of the Rules of Conduct: In case of attempt to circumvent or acting against the intent and spirit of the Rules of Conduct, Amway may at any time take corrective action at its discretion.