As used in this chapter:
(1) "Business relationship" means an agreement that governs the relationship of principal and sales representative.
(2) "Commission" means:
(a) compensation:
(i) that accrues to a sales representative;
(ii) for payment by a principal; and
(iii) at a rate expressed as a percentage of the dollar amount of sales, orders, or profits; or
(b) any other method of compensation agreed to between a sales representative and a principal including:
(i) fees for services; and
(ii) a retainer.
(3)
(a) "Direct sales company" means a person that:
(i) sells, distributes, or supplies for consideration a good or service through participants:
(A) at different levels of distribution; or
(B) in accordance with a formula for compensating participants in whole or in part based on:
(I) the sale of a good or service; and
(II) the recruitment of or the performance or action of another participant; and
(ii)
(A) permits participants to recruit other participants to sell, distribute, or supply for consideration the person's good or service; or
(B) provides for commission, cross-commissions, override commissions, bonuses, refunds, dividends, or other consideration that is or may be paid as a result of:
(I) the sale of a good or service; or
(II) the recruitment of or the performance or action of another participant.
(b) As used in this Subsection (3), "participant" means an independent agent, contractor, or distributor.
(4) "Principal" means a person who:
(a) engages in any of the following activities with regard to a product or service:
(i) manufactures;
(ii) produces;
(iii) imports;
(iv) sells; or
(v) distributes;
(b) establishes a business relationship with a sales representative to solicit orders for a product or a service described in Subsection (4)(a); and
(c) agrees to compensate a sales representative, in whole or in part, by commission.
(5)
(a) Except as provided in Subsection (5)(b), "sales representative" means a person who enters into a business relationship with a principal:
(i) to solicit orders for a product or a service described in Subsection (4)(a); and
(ii) under which the person is compensated, in whole or in part, by commission.
(b) "Sales representative" does not include:
(i) an employee of a principal;
(ii) a person licensed under Title 31A, Insurance Code;
(iii) a person licensed under Title 41, Chapter 3, Part 2, Licensing;
(iv) a person licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act;
(v) a person who provides a product or service under a business relationship with a principal that is incident to the purchase or sale of real property;
(vi) a person who places an order or purchases a product or service for that person's own account for resale; or
(vii) an independent agent, contractor, or distributor through whom a direct sales company supplies for consideration a good or service.
(6) "Terminates" or "termination" means the end of a business relationship between a sales representative and a principal, whether by:
(a) agreement;
(b) expiration of a time period; or
(c) exercise of a right of termination by either the principal or the sales representative.