Are all organizations with a pyramid structure operating illegal pyramid schemes?

The assertion that some organizations with a pyramid structure may operate legitimately highlights that not all pyramidal arrangements are inherently illegal. Pyramid schemes are characterized by their unsustainable business model, which relies on continuous recruitment of new members to generate income, rather than on legitimate product sales or services.

In contrast, there are organizations, such as certain multi-level marketing (MLM) companies or legal business models, that utilize a pyramid structure but also offer products or services that are sold to customers, providing a legitimate value. These organizations generate income not solely from recruitment fees but also from legitimate sales of goods or services, making their structures compliant with legal standards. Hence, while the pyramid structure can be associated with fraudulent schemes, its mere existence does not automatically qualify an organization as operating an illegal pyramid scheme.