ELKEN DISTRIBUTOR’S RULES & REGULATIONS
The following Elken Distributors’ Rules & Regulations are implemented with the purpose of safeguarding the rights and regulating the obligations of its Distributors rather than restraining their independent business activities. In order to mould yourself to be a responsible and ethical Elken Distributor, you must understand and abide by the Rules & Regulations, which have the objective of building a healthy business networking environment for your long term and profitable business at Elken, promoting unity and positive harmony among fellow Distributors, and between Distributors and the Company. Your strength and success as an Elken Distributor is a collective effort, founded upon the enduring partnership of commitment and trust that exists between the Company and our Distributors.
It is the responsibility of each Distributor to; (i) read, understand, adhere to and ensure that he/ she is aware of and operating under the most current version of the R&R; (ii) update their contact details and correspondence/e-mail addresses as the Company will send communications to Distributors’ last known address and contact details as captured in its database.
Each Distributor agrees that the relationship between a Distributor and the Company is entirely contractual. Accordingly, the Company will not recognise any claim by a Distributor that the relationship is or has been quasi-contractual, has arisen by implication from any continuing practice or course of action, has been verbally authorised by any employee of the Company in contradiction of the Rules & Regulations or policy, or is otherwise implied in fact or in law.
The Elken Distributors’ Rules & Regulations in their present form and as amended by the Company from time to time are incorporated into and form an integral part of the Distributor Application Form and constitute part of the agreement between the Company and the Distributor (“Agreement”). Failure to comply with any of the provisions herein may result in termination of your distributorship.
1. Becoming a Distributor
a. Any individual who is of legal age residing in Malaysia, Singapore and Brunei can apply to be an Elken Distributor by completing the Distributor Application Form manually or via e-registration. Any application in the name of a company or a third party will not be accepted.
b. The Company reserves the right to accept or to reject any application without assigning any reason whatsoever.
c. A Distributor of the Company is an independent contractor and shall not represent himself to others as a franchisee, partner, agent or authorized representative of the Company and accordingly shall not have the right to negotiate or conclude any contract on behalf of the Company or hold himself/herself as having such a right unless Company’s prior written consent.
d. A Distributor must not be an existing agent, representative, employee or spouse of an employee of the Company.
e. All applications must be sponsored by an existing authorised Distributor.
f. The distributorship of an unmarried Distributor shall be limited to himself/herself only and he/she shall not have any other partner.
g. A legally married couple is only allowed to apply for one distributorship.
a. Distributors who have a minimum of 1SV (PS) in any SV month within their distributorship period will maintain their distributorship for the subsequent 12 months from the SV month that they made the last purchase. Thereafter, their distributorship will be terminated automatically at the end of the 12th SV month.
b. Any Distributor may choose to resign their distributorship with written notice by way of official letter at any time, after which his/her downlines transferred to his/her upline/sponsor.
c. A Distributor may reapply to be a new Distributor upon the expiry of his/her distributorship (i.e. 12 months from last purchase) or 6 months after Company receives his/her resignation letter, whichever is earlier.
3.1 Principle of Sponsorship
a. It is against the Company’s policy for any Distributor to change sponsor through any means. Any application submitted with the intent to change sponsors will be rejected.
b. It is against the Company’s policy for a Distributor to be sponsored under two or more distributorships. Such conduct will result in their distributorship being terminated.
c. Application for the change of sponsor or any change in placement or change of the entire personal group is not permitted.
a. No Cross-Sponsoring of distributorship shall be allowed. Cross-Sponsoring in this context means:
b. In the event of Cross-Sponsoring, the following actions shall be taken:
c. In addition, the Company reserves the right to:
4. Representations & Obligations
5. Violation of R&R
5.1 Prohibited Acts
A Distributor shall not:
a. Incur any liability or debt in the name or on behalf of the Company;
b. Make or modify or alter or discharge any contracts in the name of the Company;
c. Negotiate or misled others that they have such right, enter into contracts and/or agreements for and on behalf of the Company;
d. Sponsor or solicit or attempt to sponsor or solicit Company’s Distributor, employee, supplier, manufacturer, consultant, vendor or anyone into any other trade, business or profession whether directly or indirectly in competition with or in conflict with the Company’s interest and/or to alter or terminate their employment or business relationship with Company.
e. Solicit the participation of any Company’s Distributor, employee, supplier, consultant, manufacturer and vendor to purchase or sell any products other than the Company’s or to present other opportunities or to solicit their participation in any other trade, business or profession in competition with the Company. Notwithstanding the aforesaid, this provision does not apply to businesses/trades conducted by the Company’s associated, related and affiliated companies within the Elken Group;
f. Be engaged in or be interested, whether directly or indirectly or whether as principal, agent, servant or licensee in the sale of any products or goods other than those of the Company in any trade, business or profession in competition with the Company. Notwithstanding the aforesaid, this provision does not apply to businesses/trades conducted by Company’s associated, related and affiliated companies within the Elken Group;
g. Influence existing Distributors, employees or agents of the Company and/or those of its related, associated and affiliated companies to likely cause operational disruptions, reputational damages and financial losses to the Company and/or its related, associated and affiliated companies;
h. Be involved in any unauthorized media release or publication of Elken’s corporate related information (including giving personal interviews) to newspapers/magazines/other, whether through any form of mass communication without prior written approval from the Company.
i. Violate any terms stipulated in the Distributor Application Form, Elken Distributors’ Rules and Regulations, Code of Ethics, policies, procedures, directives, any applicable laws and regulations, including but not limited to Direct Selling and Anti Pyramid Scheme Act 1993 (“DS(APS)”) and Personal Data Protection Act 2010 (“PDPA”).
5.2 Reporting of Violation
a. It is the obligation of every Distributor to abide by and uphold the integrity of the R&R. If a Distributor observes another Distributor committing any violation of the R&R, he/she shall report such violation to the Company by providing details and evidence pertaining to the nature of the alleged violation to the Company’s Customer Service & Support Department.
5.3 Rectification, Suspension and Termination Procedures due to Violations of R&R
a. Violation of R&R is a serious issue and constitutes a breach of the Agreement by a Distributor. It is likely to cause a negative impact not only on the involved Distributor’s business, but also on others Distributor’s businesses. At the same time, it may cast a dishonourable image and negative impression on the Company, its Distributors, business partners, officers, shareholders, Board of Directors and agents to the media, relevant authorities and general public. The Company provides guidance and advice in rectifying any violation and when the severity of the situation warrants, it shall take appropriate action against the Distributor involved. In the event of violation, the following procedure shall be observed:
5.4. Effects of Suspension and Termination
a. A Distributor may choose to suspend his/her Distributorship with written notice to the Company. In doing so, the Distributor must wait until the Distributorship expires (12 months from last purchase) before reapplying to be a Distributor.
b. Refusal of delivery or a request for return of products previously purchased for a refund shall be deemed as self-suspension.
c. Any Distributor whose Distributorship has been suspended or terminated:- (i) is not permitted, either directly or indirectly, to enter into the premises of the Company, purchase products, hold and attend meetings and incentive trips, participate in the building, sponsoring or development of any of the Company’s Distributors and prospects; (ii) shall cease to identify himself/herself as the Company’s Distributor; (iii) shall no longer be entitled to the status of his/her Distributorship and all of Elken’s Marketing Plan, benefits and entitlements. (Standing orders for future purchases will be terminated and the Company may refund the unutilised funds (if any) after deduction of administrative charges and shall have no further claims whatsoever against the Company; (iv) subject to Company’s discretion, his/her downline organisation shall be transferred to his/ her direct sponsor; (v) shall covenant not to influence existing Distributor, employees or agents of the Company or those of the Company’s related, associated and affiliated companies in such manner that may cause operational disruptions, reputational damages and financial losses to the Company and/or its related, associated and affiliated companies.
d. The Company reserves the right to claim damages from the resigned, suspended or terminated Distributor if he/she is in breach of the R&R or has participated in any other actions that may cause losses in terms of financial or otherwise to the Company.
e. A Distributor, who has resigned or been suspended or terminated can reapply for a new Distributorship after his/her resignation, suspension or termination subject to the Company’s approval and Clause 2 (c). Any person reapplying to become a Distributor of the Company shall not lay claim to any of his/her bonuses/ incentives, ranks or positions, which he/she enjoyed or held prior to his/her suspension/termination or resignation.
6. Sale, Succession of Distributorship, Marriage & Divorce
6.1 Sale of Distributorship
The sale of distributorship is subject always to prior written approval of the Company’s Head Office and upon fulfilling the following conditions:
a. Only a distributorship in good standing with the Company and having the rank of DM (DCM) and above and not in violation of the Distributor Application Form and Rules & Regulations may be sold. The Distributor must write in to the Company’s Head Office for prior written approval before any sale of distributorship can be made. Approval is based on the review of the proposed purchaser’s qualification, intention to manage the distributorship and will be subject to the consent and approval of the Company.
b. The sale of the distributorship follows the below preferential order:
(i) First priority
- The Distributor’s immediate sponsor
(ii) Second priority
- Any upline Distributor
(iii) Third priority
- One of the Manager downlines sponsored by the Distributor
(iv) Fourth priority
- One of the Distributors in the Company with the rank of Manager and above
c. Upon obtaining prior written approval of the sale by the Company, a sale and purchase agreement must be signed between the buyer and seller. A copy of the duly stamped sale and purchase agreement must be extended to the Company for safekeeping.
d. Any Distributor who has sold his/her distributorship can only apply to join as the Company’s Distributor after one year from the date of the sale. Accordingly, he/she will start from the very beginning with no link to previous downlines.
e. All bonuses accrued to the previous distributorship will be paid to the new owners. The awards and recognition previously awarded to the distributorship will be transferred to the new owner, if the new owner is presently a Distributor of the Company. However, the new owner has to attain the required qualification before he/she is entitled to acquire any due awards and recognition of the transferred distributorship.
f. Selling and buying an existing distributorship as a means of changing distributorship is generally discouraged. The Company will closely scrutinise such transactions for violation of other important policies.
g. The Company reserves the right to disapprove any sale of distributorship without having to give any reason. Any effort to circumvent compliance of this section will render the transfer to be declared null and void.
a. Upon the demise or incapacity or health problems of a Distributor, his/her distributorship shall be transferred to the distributor’s beneficiary subject to the Company’s Beneficiary Policy and relevant laws of the country concerned. For joint distributorship (e.g. with spouse), upon the death of a legally married spouse, all the rights, titles, interests and benefits under their joint distributorship shall be vested in the surviving party.
a. If 2 Distributors are married to each other and both of them are neither a Diamond Council Distributor (DCM) nor a Diamond Manager (DM), then one of the distributorships will be terminated automatically.
b. If one of 2 Distributors who are married to each other is either a DCM or a DM, then the other distributorship has to be terminated and replaced by a joint distributorship of the couple. However, the original downline structure of the terminated Distributor shall remain unchanged, i.e. the downline of the terminated Distributor shall be moved upwards to the upline of the terminated Distributor.
c. If both Distributors are DCMs and at the same time DMs, then their individual distributorship may be retained with their original status. However, the couple may apply to terminate either one of the distributorships and become a single distributorship, in which case the original downline structure of the terminated Distributor shall also remain unchanged, i.e. the downline of the terminated Distributor shall be removed upwards to the upline of the terminated Distributor.
d. A husband with more than one legal wife can elect only one wife for joint distributorship. Such other wives of his wishing to be Distributors must be sponsored under the direct joint distributorship.
e. The Distributor referred to in Clause (6.3a), (6.3b), (6.3c) and (6.3d) is required to submit to the Company a copy of his/her marriage certificate and for (6.3d only) a written notification of his polygamy status. Failing to provide the documents will be considered a violation of the Rules & Regulations of the Company.
f. The Company may, at its sole discretion, terminate the distributorship of a Distributor if the Company is of the opinion (in which case the opinion shall be final) that the Distributor and/or his/her spouse (whether or not the spouse is a registered partner) has violated the Rules & Regulations of the Company.
g. A Distributor may own or have an ownership interest in only one distributorship except as provided below:
h. A Distributor is required to report the above issue to the Company, failing which he/she shall be deemed to have violated the Rules & Regulations of the Company.
a. Whenever a distributorship is separated as a result of divorce, the separation must be accomplished in such a way that it does not adversely affect the interests of other distributorships in the same line of sponsorship.
b. During the period in which divorce proceedings are pending, none of the parties are allowed to operate or participate in any other direct sales business.
c. The divorcing couple shall reach an agreement between them and the Company will continue to pay bonus in the same manner before the separation or divorce until it receives written notice signed by both parties or final court decree, and either of them can submit the “Application for Termination of Distributorship”.
d. The withdrawing party upon the completion of his or her termination may reapply to become a Distributor under a new sponsorship. In the event of further disputes arising from a divorce but beyond the control of the Rules & Regulations of the Company, the relevant laws of the country concerned shall prevail.
7. Product Sales and Pricing
7.1 Sales Representations
a. The integrity of Elken’s Compensation Plan and the confidence of other Distributors shall be upheld at all times as such Distributor shall present the Company’s products and Elken’s Marketing Plan truthfully and accurately.
b. Distributors shall not disseminate or spread any misleading, inaccurate and untruthful information or make any disparaging comparisons/statement whether directly or by implication about the Company, and/or its related, associated and affiliated companies through any communication platform. Any comparisons/statements made by Distributors shall be used in context based on relevant and substantiated facts and not unfairly selected facts that distort the truth.
c. Distributors shall not claim, represent, and imply directly or indirectly, that the Company’s Products other than those found in current Company literature and/or labels. If the reputation of the Company is damaged for this reason, Distributors concerned will be held responsible for all costs or damages arising from such action. Furthermore, they shall not bind or commit the Company to any settlement related to such costs or damages.
d. It must be made clear that the Company’s programme is based on sales of the Company’s products and not for recruitment or rank advancement in Elken Marketing Plan. It shall be stated that sales commissions are generated through diligent and committed efforts and Distributors are not allowed to exaggerate any income claim.
e. All statements regarding Product description and use must conform in every way to the written policies of the Company.
f. Distributors shall not request any prospective Distributors to purchase/make payment to any individual/entity or impose minimum purchase or compel to purchase more products than they can reasonably sell, use or maintain a specific amount of products before joining the Company.
g. Distributors shall not purchase products on behalf of another Distributors or through usage of another Distributor’s account to qualify for commission and/or bonuses or rank advancement under Company’s Marketing Plan.
h. Distributors shall only use credit card with their own name embossed on the credit card for any purchases and shall ensure the credit card information is accurate and there are sufficient funds for such transactions.
a. Distributors shall sell products to customers at Retail Price (RP). Only Distributors can enjoy the Company’s products at the Distributor Price (DP) and those offered as the Company’s official promotional packages. The RP and DP of the Company’s products are subject to change without prior notice.
b. Distributors shall not under-price or over-price any product of the Company for the purposes of gaining higher profits or promoting sales. This action may warrant termination and/or legal action against the violators by the Company.
c. Under-pricing or over-pricing in the above context means:
8. Product Guarantee & Refund
8.1 Product Guarantee
In the event of any dissatisfaction with the product, manufacturing or packaging defect, Customers/ Distributors can return/exchange the Product within 90 days from the date of purchase. They have to provide a good reason and return the said goods together with the Customer Order Receipt copy. Thereafter, Customers/Distributor can return the products to the Company and exchanges for the same products within 90 days from the purchase date.
The Products returned must be in good condition, useable, resellable, restockable, unopened, unaltered and the products have not expired, Customers/Distributors must attach the following at the time of returning the products:
However, this guarantee only applies to products that were purchased through Company’s official website and/or from Distributors. Expired products or damaged products due to negligence, misuse, unintended use, mishandling or unauthorized modification are not accepted.
Upon voluntary resignation of Distributorship, Distributor may apply to return any Company’s Products within 180 days from the purchase date provided that the Products are in good condition, useable, resellable, restockable, unopened, unaltered and the products have not expired.
Upon approval, being granted the amount refunded will be equivalent to Distributor’s cost of Product being returned, less total bonus paid on the original purchase, any benefits/incentives paid under any campaign and 10% service charge for handling fee and freight cost.
9. Trademark & Advertisement
a. Apart from the printed materials that the Company may supply and/or sell to Distributors, a Distributor should not use the name of the Company, its logos, trademarks and/or other representation of the Company without its prior written approval of the Company. Upon expiration, suspension/termination of a Distributorship, the affected Distributor shall:
b. Distributor shall not register or use any of the Company’s names, trademarks, logos, “ELKEN” and product names in any website, URL (Uniform Resources Locator) address, domain name, electronic media advertising or other forms of advertisement.
a. Distributors shall not advertise the Company’s Products and/or its Compensation Plan without the prior written consent of the Company except by use of the exact language used in the Company’s printed materials.
b. Distributors shall not duplicate, reprint or personalized any/all Company official literature and materials without prior written approval from the Company. Any/all privately produced promotional materials must be approved in writing by the Company prior to its publication.
c. All products of the Company shall be marketed and sold in its original form and packaging. Distributor shall not alter, relabel, repackage, rebundle, unbundle, sell in loose form, or otherwise change any of the Company’s products or sell any product under any name or label other than that authorised by the Company.
d. Distributor shall obtain prior written approval from the Company prior to selling, participating and displaying Company’s products at trade shows/conventions or any other e-commerce platforms.
e. Distributor shall obtain prior written approval from the Company before participating in any media interviews, response to any media inquiries and promote product or opportunity through any news report or trade industry publication.
10. Bonus Payment
a. All monthly computed Bonuses payable under Elken’s Marketing Plan are based on the sales of Company’s products not through recruitment or rank advancement and on SV month.
b. Monthly Bonus Cheques, excluding those for Year-End Bonus, will be issued on or before the 28th of the following month. In the event of unforeseen circumstances, there may be a few days of delay due to external factors beyond the Company’s control. However, commissions and/or bonuses payable under Elken Marketing Plan and any product campaigns and incentives (if any) shall only be released or redeemed subject to payment of all money whatsoever and howsoever owing or payable or due from the Distributor to Company or to any subsidiary or related/associated/affiliated companies within Elken Group under any other account/joint account whether as borrower, guarantor, assignor, or otherwise with the Company or to any subsidiary or related/associated/affiliated companies within Elken Group. The Distributor expressly agrees that if any money whatsoever and howsoever owing or payable or due from the Distributor to the Company or to any subsidiary or related/associated/affiliated companies within Elken Group under any account/joint account whether as borrower, guarantor, assignor, or otherwise with the Company or to any subsidiary or related/associated/affiliated companies within Elken Group, the Company may at any time have the right to debit the commissions and/or bonuses payable under Elken’s Marketing Plan and any product campaigns and incentives, or withdraw or forfeit facilities and privileges of the Distributor (if any) towards satisfaction of any liabilities of the Distributor due and payable to the Company or to any subsidiary or related/associated/affiliated companies of the Company within Elken Group.
c. Upon receiving their monthly Bonus Statements, Distributors should check to ensure the figures are accurate. Any queries should be made within 14 days from the issuing date of the statements, failing which the Bonus Statement is deemed correct.
d. The Company shall be entitled to adjust all bonuses paid or to be paid as a result of returned/refund of products and the bonuses shall be adjusted accordingly in Distributor’s monthly statement.
11. General Provisions
a. Confidentiality: Distributor shall neither disclose to third party nor use confidential information including but not limited to genealogy, manufacturer information, commission and sales reports Product specifications or formula and other business and financial information of the Company received whether in electronic or written form for any other purpose except as permitted by the Company nor directly or indirectly contact or communicate with the Company’s supplier, vendor, and manufacturer except with Company’s prior written consent.
b. Waiver: Failure to enforce or to require the performance at any time of anyone of the provisions of these R&R shall not be construed as a waiver of such provision, and shall not affect either the validity of this R&R or any part hereof or the right of any party thereafter to enforce each and every provision in accordance with the provisions of these R&R. Any waiver by the Company can and shall only be effected in writing by the authorised personnel of the Company.
c. Indemnity: Distributor shall indemnify and hold harmless the Company, its shareholders, officers, directors, employees and related/associated/affiliated companies from and against any party’s claim, demand, liability, loss, cost or expense (including, and attorneys’ fees), suit, proceeding howsoever caused whether for contractual breach, defamation, libel or slander, any loss or damages and goodwill arising out of or in any way related to or connect (alleged or otherwise) with a Distributor’s: (a) activities as Distributors; (b) breach of terms of the Agreement or R&R; and/or (c) failure to comply with any applicable laws, including but not limited to DS(APS) and PDPA
d. Limitation of Liability: To the extent permitted by law, the Company shall not be liable for, and each Distributor hereby releases the Company from, and waives all claims for any loss of profits, direct, indirect, special or consequential damages or any other loss incurred or suffered by Distributor as a result of: (a) breach of Agreement, R&R, Code of Ethics, policies, procedures, directives, terms and conditions of the Business Manual, and/or Elken Marketing Plan by Distributor; (b) Distributor’s business operations; (c) any inadvertent, incorrect or wrong data or information provided by Distributor; (d) violation of any copyright in connection with materials provided by Distributor; or (e) failure by Distributor to provide any information or data necessary to the Company for business operations including but not limited to marketing and promoting of Company’s Products and/or the joining and acceptance of any individual as the Company’s Distributor or the payment of commission and bonuses.
e. Limitation of Damages: To the extent permitted by law, the Company, its affiliates, officers, directors, shareholders, employees and other representatives shall not be liable for, and each Distributor hereby releases the foregoing from, and waives all claims for loss of profits, direct, indirect, incidental, special or consequential or exemplary damages which may arise out of any claim whatsoever relating to the Company’s performance or non-performance, act of omission with respect to the business relationship or other matters between the Distributor and the Company whether in contract, tort or strict liability. Furthermore, it is agreed that any damages to the Distributor shall not exceed and is hereby expressly limited to the amount of unsold Company’s Products owned by Distributor and any commission and/or bonuses owed to Distributor.
f. Force Majeure: The Company shall not be responsible for delays or failure in performance caused by circumstances beyond the Company’s control including but not limited Act of God, to strikes, labour difficulties, fire, war, government decrees or orders, or curtailment of a party’s usual source of supply.
g. Entire Agreement: This Agreement, R&R and Elken Marketing Plan together constitute the entire Agreement between Distributor and the Company.
h. Notices: Each notice, demand or other communication of any kind whatsoever given/ served by either the Company or Distributor shall be in writing and delivered by electronic communication whether by telex, telegram, e-mail or fax (if confirmed in writing sent by registered mail or by personal service). Any Party may change its address for notice by giving written notice to the other in the manner provided in this section. Any such notice, demand or communication shall be deemed to be have been given or served on the date personally served by personal service, on the date of confirmed dispatch if by electronic communication, or other evidence if delivery is by mail.
i. Changes and/or Amendments: Distributor shall comply with these R&R, policies, procedures, Code of Ethics, directives and any amendment made by the Company from time to time. The Company reserves the right to add, amend/change or substitute its Marketing Plan, Terms of Agreement, R&R, policies, procedures, Code of Ethics, directives at any time without prior notice. Amendments will be communicated by the Company by publication at the Company’s website and shall be effective and binding on the publication date. In the event any conflict exists between the previous documents/policies and any such amendments, the amendments shall prevail.
j. Should any part of this Agreement be unenforceable (including any provision of exclusion of liabilities), the enforceability of any other part of therein shall remain in full force and effect.