I think it works like this:
MLS association pays the players wages at every club and each season gives all clubs in the league a particular salary ( Salary Cap ) they cannot go over aswell as this they put rules in for players who can be put in your team youth development,international etc.Contracts for players involved in the MLS are for there clubs untill it expires or are bought/exchanged or waived.In the MLS they do not use transfer fees but player exchange or even paying with Draft picks these can be for the Super draft or the Supplement ( Might be incorrect spelling ) draft.But your allowed to buy players from abroad with money but some cases the transfer budgets are really low unless you part with a star player ie Landon Donavon.
MLS association basically owns all the clubs and players and are entitled to money from transfer fees and endorsements aswell as a cut of merchandise sales.This way no club cannot get into debt or even worse be extinct in the future.
Hope this helps a bit. | 
