Direct Sellers' Licensing Information

Direct Sellers' Licensing Information

For information about licensing select from the options below.

 

• Who is required to be licensed
• Exemption from licensing
• Licencing
• Multi-level Sales Marketing Opinion Letter (Registrar's Requirement)
• Direct Sellers’ Licence fee (section 16, regulation 5)
• Address or Business Operation Change, etc. (section 20)
• Transfer of Licence Prohibited (sections 11, 12 and 13)
• Business Name Requirements
• Direct Sellers’ Licence Bond Requirement
• Appeals of the Registrar Decisions (section 21)

 

Who Is Required to be Licensed (section 2)

• Telephone Sellers
• Door-to-door (Home) Sales Callers

Unless exempted by the legislation, any business or salesperson who initiates a sales call by telephone to a consumer’s home or initiates a sales visit to a consumer’s home, is a “direct seller” and must apply for and be granted a direct seller’s license pursuant to The Direct Sellers Act.

Salespersons of a licensed direct seller, unless exempted by legislation, must also be licensed.

For exemptions read the Exemptions from Licensing section.

If required to be licensed it is an offence to operate a direct sellers business or make direct sales calls to a consumer’s home without first obtaining a license.
 

The Direct Sellers Act:

2 (c) “direct seller” means a person who:

(i) goes from house to house selling or offering for sale, or soliciting orders for the future delivery of, goods or services;
(ii) by telephone offers for sale or solicits orders for the future delivery of goods or services; or
(iii) does both of the things mentioned in subclauses (i) and (ii);

For clarity, a direct sellers’ license is required if the following occur:

• The seller or salesperson either:
  • visits consumers at their home or residence, or
  • by telephone contacts consumers in their home, and
• The seller or salesperson is the one who initiates or makes the first call or contact to/at the consumer’s home.

A license is required even if the in-home sales calls are made infrequently.

Note, if the consumer makes the first contact with the seller or the salesperson about a specific product or service, that salesperson does not have to be licensed as a “direct seller” as long as the seller or salesperson is simply responding to that specific contact (even if they intend to meet thereafter at the consumer’s home). However, if afterwards the seller contacts the consumer at their home for another or a different item or service and the call or visit on this other item or service was not initiated by the consumer, a license is required.
 

Calls generated from Internet Searches by a Consumer

Sellers, who make telephone sales calls or door to door sales calls to a consumer’s home from information in a data base generated from internet searches by a consumer, are required to be licensed unless that specific seller has been authorized beforehand by the consumer to call on them at home.
 

Multi-level Marketers

Multi-level Marketing (MLM) is a method for generating revenues from sales made personally as well as from the sales of others. Under this method, if any level of salesperson on the sales MLM ladder of salespersons initiates or makes the first call or contact to/at the consumer’s home (even if this is only done once in a while), a direct sellers license is required.
 

Home Party Sellers

Home party selling is a method of generating sales by hosting a “home party” at which products will be offered for sale. If the home party seller initiates the invitation contact by calling or visiting at a consumers home or to arrange for a home party (even if this is only done once in a while), a direct sellers license is required.
 

Heating, air conditioning units or water heater contracts

This is applicable to applicants under The Direct Sellers Act who intend to enter into heating, air conditioning or water heater contracts with Saskatchewan consumers.

• All salespeople or agents who initiate contact by attending or calling a Saskatchewan residence for purposes of entering into an agreement with a Saskatchewan consumer must be individually licensed under The Direct Sellers Act.
• The minimum bond required for this sector is set at $150,000 unless otherwise decided.
• As a minimum the following licensing conditions will be imposed:
  • No installation within the 10 day cooling off period of The Direct Sellers Act.
  • No removal of a furnace or water heater during the winter months of November thru March unless the written consent of the homeowner and any other party with an interest in the property is obtained.

 

Exemptions from Licensing (section 4 and regulations 3 and 4)

Exemptions for Certain Types of Business

S 4 of The Direct Sellers Act exempts:

(a) a person selling newspapers, water, propane gas or fuel petroleum products;
(b) a person selling food … that, at the time of delivery, are in an unfrozen and perishable state;
(b.1) a person selling lumber or firewood if the person or the person’s employer as a place of business in the municipality …;
(c) a person selling feed grain, feed supplements, fertilizer or weed spray if he resides or has a place of business in Saskatchewan;
(d) a person selling the following services:
(i) the treatment of feed, seed grain or growing crops;
(ii) the breeding, care or treatment of live stock; or
(iii) custom tilling, seeding or harvesting;
(e) a person selling nursery stock grown in Saskatchewan;
(f) a farmer selling products raised in Saskatchewan on his own farm;
(h) a merchant having a recognized retail store in Saskatchewan where more than 50% of the goods or services being sold are sold at the retail store. The expression “recognized retail store” does not include a dwelling, mail-order office, display room, office, repair or service shop, warehouse, studio or any other place of a like nature notwithstanding that the owner or occupant thereof is or may be assessed by the municipality for business tax purposes in respect of such place.
(k) an individual selling goods or services on behalf of an organization … having objects of a benevolent, religious, charitable, philanthropic, educational, agricultural, scientific, artistic, social, political, professional, fraternal, sporting, athletic or other useful nature and not formed for gain;

Sections 3 and 4 of The Direct Sellers Regulations

3 The Act does not apply to:

(a) a person… required to be licensed or registered pursuant to:

(i) The Agricultural Implements Act;
(ii) The Electrical Licensing Act;
(iii) The Fisheries Act (Saskatchewan), 1994;
(iv) The Motor Dealers Act;
(v) The Private Vocational Schools Regulation Act, 1995;
(vi) The Cemeteries Act;
(vii) The Prepaid Funeral Services Act;
(viii)The Saskatchewan Insurance Act;
(ix) The Real Estate Act;
(x) The Securities Act, 1988; or

(b) direct sales of … private storage units …of insurable crops…
 

Exemptions for Certain Salespeople

A salesperson acting for a licensed vendor is exempt from being required to get an individual licence if:

(a) the total price of the goods or services on an average sale … is less than $500; and
(b) … it is not prejudicial to the public interest….

This exemption for sales persons is not automatic; the licensed direct seller must apply for the exemption on behalf of their sales staff. If exempted, these exempt salespersons must carry a company issued and Registrar (of The Direct Sellers Act) approved identification card (ID) card.

There are no licensing exemptions for direct salespersons who sell home renovation products or services, all direct salespersons of home renovation products must be licensed.
 

Internet Sales

Internet sales contracts are regulated under Part V of The Consumer Protection and Business Practices Act and Division 2 of The Consumer Protection and Business Practices Regulations. A direct sellers’ licence is generally not required for internet sales purposes unless there is an initiating call to the consumer’s home in person or over the telephone.

Pursuant to Division 2 of the Regulations, when using the internet to enter into a contract the following is required:

The legislation requires internet sellers to:

• Give individual consumers the opportunity to accept or decline the contract, and to correct errors immediately before entering into the contract.
• Provide the consumer with a copy of the contract within 15 days by email, fax, mail, in-person, or by any other manner that allows the supplier to prove that the consumer received it and can access, retain, and print the information.

The Regulations allow the individual consumer to cancel an internet sales contract if certain requirements are not met – these include the right to cancel:

I. Within 7 days after receiving the copy of the contract from the internet seller if:

a.    The internet disclosure requirements were not met; or
b.    The individual consumer was not given an opportunity to accept or decline the contract, or to correct errors immediately.

II. Within 30 days after entering into the contract if the supplier does not provide the consumer with a copy of the contract.

III. At any time before the delivery of goods or commencement of services if:

a.    The supplier does not deliver the goods within 30 days of the specified delivery date or an amended delivery date;
b.    The services have not commenced within 30 days of the specified commencement date or an amended commencement date; or
c.    A delivery date or commencement date is not specified in the contract and the supplier does not deliver the goods or commence services within 30 days after the contract is entered into.

IV. An individual consumer may cancel travel, transportation or accommodation services immediately if those services do not begin on the promised date. (Reg. 3-8)

 

Licencing

Direct sales licences are issued by the Registrar of The Direct Sellers Act.

Did you know that anyone can verify the licence of any direct seller business or salesperson, by calling the Consumer Protection Division at 1 (877) 880-5550 or 787-5550; when prompted select or press 2 for the Licensing Unit.

To obtain a licence the direct seller must:

• Register a business name (in some circumstances the applicant may use their own name without it having to be registered)
• Submit an application to the Registrar.
• Submit a copy of the sales contract to be used (these must be accepted for use by the Registrar)
• Submit a copy of any identification card to be used by sales persons
• Obtain a bond and submit the original from your bonding company or insurance agent
• For multi-level marketing sellers, obtain an opinion letter from Industry Canada
• Pay the appropriate annual licensing fee
• Agree to a criminal record check
• Arrange an in person meeting in Regina or Saskatoon with the Registrar if entering into contracts home heating, air conditioner or water heater products with consumers

Once the licence is issued, the licensee and/or their salesperson:

• Is required to carry on business in the name shown in its licence
• Is governed by any licence term or condition
• Can only sell or offer for sale the class of goods or services specified in the licence [s.5 (4)]
• Must use only the sales contract accepted by the Registrar of The Direct Sellers Act
• Must provide the buyer with a statement of cancellation rights
• Is prohibited from holding him/herself out as being licensed or bonded unless requested to do so by the person who is being solicited.
• Is required to comply with all municipal bylaws applicable to direct sellers as a condition of licensing

The Registrar (located within the Consumer Protection Division of Saskatchewan’s Financial and Consumer Affairs Agency) may refuse to grant a licence or may make a licence subject to terms, conditions or restrictions. The Registrar may also suspend or cancel a licence.

 

Multi-level Sales Marketing Opinion Letter (Registrar's Requirement)

Multi-level Marketing (MLM) is a method for generating revenues from sales made personally as well as from the sales of others. Under this method, if any level salesperson in the sales ladder of salespersons initiates or makes the first call or contact to/at the consumer’s home (even if this is only done once in a while), a direct sellers license is required.

When applying for a direct seller’s licence, the top-level Multi-level Marketing (MLM) seller must make arrangements for its marketing plan to be submitted to Industry Canada and request from them an opinion as to whether the plan is in compliance with the Competition Act. In cases where the Competition Bureau declines to issue an opinion, or if otherwise approved, the Registrar (of The Direct Sellers Act - Saskatchewan) will consider accepting an independent legal opinion from a solicitor affiliated with/through the Direct Sellers Association (DSA). In such cases, the applicant will need to contact the DSA for information. Note that the Registrar will only consider an opinion letter from a lawyer that does not otherwise provide services to the applicant that are or could be perceived as being in conflict with the regulatory scheme of direct sellers in the Province of Saskatchewan.

If found in compliance, this opinion letter applies to all downstream sellers if their selling method is similar and further opinions for those downstream sellers would not be required.

 

Direct Sellers’ Licence fee (section 16, regulation 5)

Every licence shall expire one year after the day on which it is issued unless previously suspended or cancelled.

The annual fee payable for a licence is:

• Vendor whose salespersons are exempt $600
• Vendor whose salespersons are not exempt $300.00
• Vendor with no salespersons, $125.00
• Each salesperson’s licence (unless exempt) $125.00

Once a licence is issued, fees are non-refundable.

 

Address or Business Operation Change, etc. (section 20)

Every licensed vendor shall give the registrar prior written notice of any of the following:

• a change in the address for service;
• a change in membership, if the vendor is a firm;
• a change in its business name, if the vendor is a firm;
• a change in its officers or directors, if the vendor is a corporation;
• an amalgamation to which it has been a party, if the vendor is a corporation.

 

Transfer of Licence Prohibited (sections 11, 12 and 13)

• The holder of a licence as a salesman may only act as a direct seller for or on behalf of the vendor whose name is specified in his licence.
• The transfer of the licence of a salesman from one vendor to another is prohibited.
• Where a salesman whose licence is cancelled is appointed by another vendor, or is reappointed by the vendor with whom he was previously licensed, a new application shall be made to the registrar for a licence.
• Where a salesman ceases to represent a vendor, that vendor shall immediately give notice in writing to the registrar that that salesman has ceased to represent him and the receipt of such notice by the registrar shall operate as a cancellation of the licence of the salesman.

 

Business Name Requirements

With respect to the name on a Direct Sellers licence, licensing bond and consumer contracts:

• A sole individual must apply for a licence under their individual name and the registered business name (if any) if that registered business name (under The Business Names Registration Act) is to be used in the marketplace.
  • The licence will be issued in those names and the required licensing bond must be in the name listed on the licence.
  • The sales contract with the consumer must include all the names listed on the licence.
• A partnership may apply for a license under their individual names or the registered firm or business name (if any) if that registered name (under The Business Names Registration Act) is to be used in the marketplace.
  • The licence will be issued in the name selected and the required licensing bond must be in the name listed on the license.
  • On the sales contract with the consumer, a licensed partnership (the firm) must use the name listed on the licence.
• A Corporation must apply for a license under its corporate name(s) and its registered business or firm name (if any) if that registered business or firm name is to be used in the marketplace.
  • In the case of a sole corporation, both the corporate name and the business name, if any, will be listed on the licence. The name(s) listed in the license must appear and be used on any bond and/or any consumer sales contract [s. 267 of The Business Corporations Act, s. 9.1 of The Business Names Registration Act].

In all cases, the consumer sales contract must be accepted for filing by the Registrar of The Direct Sellers Act.

When using a business or firm name, that name must be registered pursuant to The Business Names Registration Act with the Corporate Registry of the Information Services Corporation (ISC) and it must be kept active. ISC may be contacted at 306 787-2962. There is a periodic fee required by ISC to keep this registration active.

For reference:

• The Business Corporation Act
   

Publication of name

267(1) A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation.

(2) Subject to subsection (1), a corporation may carry on business under or identify itself by a name other than its corporate name, where that other name has been registered under The Business Names Registration Act.
 

Publication of name

9.1 Every person and firm that has registered a business name pursuant to this Act shall set out his or its business name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the person or firm.
 

Failure to Keep Business Name Active [sections 7 and 7.1]

Where the registration of the firm’s business name pursuant to The Business Names Registration Act has lapsed or for some other reason been removed from the record of registrations, the firm’s licence pursuant to the Act is suspended. 

 

Direct Sellers’ Licence Bond Requirement

Before getting a direct sellers licence, a penal or surety bond is required. The original bond must be filed, copies are not accepted. Generally only one bond per vendor is required even where there are licensed salespersons. The name on the bond must match the name on the licence, so if in doubt please call the Licensing Unit 1 at (877) 880-5550 and ask for the Licensing Unit (select 2 when prompted).

To get a bond, apply to an insurance agent or to any bonding company licensed under The Saskatchewan Insurance Act for a penal bond under The Direct Sellers Act in the name(s) to be used on the direct sellers’ license (they must be identical).

Bonding amounts are subject to the Registrar's discretion and may differ from the guidelines outlined below. If in doubt as to the amount required call 1 (877) 880-5550 and ask for the Licensing Unit (select 2 when prompted). The Registrar will take into account such things as type of goods being sold, amount of sales/salespeople, marketing practices, and perceived risk to the public.

Bond Amount (guidelines):

• Sample Penal Bond
• Individual vendor with no other salespersons - includes sole proprietorships and partnerships with no other salespersons.
  • $ 5,000 (where total price of goods/services on average sale is less than $100)
  • $10,000 (where total price of goods/services on average sale is $100 or more)
  • or any other amount determined by the registrar.
• Vendor with salespersons:
  • $10,000 (where total price of goods/services on average sale is less than $100)
  • $20,000 (where total price of goods/services on average sale is $100 or more)
  • or any other amount determined by the Registrar.
• Any vendor (that is subject to The Direct Sellers Act) selling the following goods or services is required to have at minimum, a $25,000 bond:
  • Home renovations (including basements, siding, roofing, driveway paving)
  • Hearing aids/instruments
  • Vacuum sales
  • Residential energy sales
• Unless otherwise decided, any vendor (under The Direct Sellers Act) who enters into contracts for home heating products, air conditioners or water heaters is required to have, at minimum, a $150,000 bond.

 

Appeals of the Registrar Decisions (section 21)

Section 21 of The Direct Sellers Act reads:

21(1) A person who is dissatisfied with a decision of the registrar under section 14, 15, 17 or 19 may, within thirty days from the date of the decision, appeal to a judge of the Court of Queen’s Bench who may, upon hearing the appeal, make such order:

(a) respecting the granting of a licence;

(b) respecting the terms, conditions and restrictions to which the licence is to be subject;

(c) setting aside the suspension or cancellation of the licence;

(d) for further inquiry by the registrar into the facts of the case;

(e) respecting costs;

as the judge deems just.

(2) The appeal shall be by notice of motion and a copy thereof shall be served upon the registrar within the said thirty days and not less than ten days before the day on which the motion is returnable.

(3) Upon receipt of the copy of the notice of motion the registrar shall forward to the appropriate local registrar a certified copy of all documents in the possession of the registrar relating to the decision from which the appeal is being taken.

(4) There shall be no further appeal.