Before setting a real presence of the company in the US, a company has to consider if it worths it. They have to consider the cost of the presence as the cost of HR, staff, offices, insurances, consultants, compliance, the product liability and the approach to the market, the Law, distances, consumers’ habits and if there’s a different language.
A company can consider different entry strategies and different organizational models.
An overview of the status of state advertising tax legislation, what to expect going forward, and how to fight it.
Wright Andrews, Partner, Butera & Andrews
Bennet Kelley, Founder, Internet Law Center (Twitter @internetlawcent)
Impact of the Trump Administration Trade Policy on Global Supply ChainsHeather K. Pinnock
This is my segment of a panel discussion on the Administration's impact on the Supply Chain Industry at the 13th Annual Corporate Counsel Women of Color Conference in New Orleans, September 2017.
This presentation discusses antitrust issues that real-estate professionals should consider. Further detail is available at http://www.theantitrustattorney.com/2014/01/28/five-antitrust-concerns-real-estate-professionals/
An overview of the status of state advertising tax legislation, what to expect going forward, and how to fight it.
Wright Andrews, Partner, Butera & Andrews
Bennet Kelley, Founder, Internet Law Center (Twitter @internetlawcent)
Impact of the Trump Administration Trade Policy on Global Supply ChainsHeather K. Pinnock
This is my segment of a panel discussion on the Administration's impact on the Supply Chain Industry at the 13th Annual Corporate Counsel Women of Color Conference in New Orleans, September 2017.
This presentation discusses antitrust issues that real-estate professionals should consider. Further detail is available at http://www.theantitrustattorney.com/2014/01/28/five-antitrust-concerns-real-estate-professionals/
The U.S. federal government has emerged as a major marketplace for business to pursue. Since 2001, the size of federal spending has more than doubled and political pressure has resulted in more of that spending going to outside companies (federal contractors) instead of government employees.
Firms are increasingly viewing the government as a viable customer. Unfortunately, selling to the U.S. government is very different than selling to commercial customers.
This presentation by Matthew Bennet, Vice president, Charles Rivers Associates, was made during the discussion “Hub-and-spoke arrangements” held at the 132nd meeting of the OECD Competition Committee on 4 December 2019. More papers and presentations on the topic can be found at oe.cd/hsa.
Running Head: INTERNATIONAL BUSINESS 2
International Business
Student Name
University Name
Date
Instructor Name
Discuss a “real world” MNC’s international strategy. The discussion should identify the company’s strategic plans, how the factors of international strategy, above, affected them, location efficiencies, a SWOT analysis, their application of the steps in international strategy formulation, and so on.
Support your paper with a minimum of five (5) external resources In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
INTERNATIONAL BUSINESS
Introduction:
Dawn of economic process has raised up, where international business is changing into more and more common. Transnational organizations will measure among the foremost profitable within the world. An organization must bear in mind of the speech and civilization of the country wherever it plans to board with its asset. Politics and laws of the condition will moreover produce international trade simple or onerous. With the achievement of international business, its outlook is polished, on a planet scale. Effective organization of international business process includes inexpensive organization of money, workers, expansion, advertising, and announcement. This is over and over again so the association, completion and organization of the operation go well. The long lope of international business is intense as fiscal process and therefore they would similar to for catholicity persistence. Even though the business goes globally there are some issues to be considered around as such
1. Social Issues
2. Ethical Issues
3. Labour Issues
4. Environmental Issues
Impacts of Political, Legal and Economic System:
Political, economic, and legal assortment and change within the international souk, and the way executive reply to the confront with data and considerate resulting not exclusively from the business regulation though conjointly from economic expansion, sociology, faith, topography, and the past. Early labors to tie together technology and take manufactured goods into foreign markets; the crash of dispersion catalysts like super language, script, print technology, transport innovation, transmit medium, electronic medium, and advertising institution; and consequently the appearance of recent companies will calculate to manage to level back the crash. Largely North America or Western Europe is that the specific regions were these impacts have taken place. Political modification happens as nations look for to ascertain stability and order.
Government Investigations and Enforcement ActionsPolsinelli PC
The fifth webinar presentation in the M&A Litigation Series examines compliance pitfalls associated with M&A transactions. We will discuss how to evaluate antitrust risks of a transaction. We also will address compliance concerns – such as antitrust, the Foreign Corrupt Practices Act, the False Claims Act, and export control issues – that could significantly impact the scope, duration, and magnitude of necessary due diligence. Finally, we will address post-merger considerations that could decrease the severity of a compliance concern if one were to arise after a merger or acquisition has been completed.
On our agenda:
-Pre-transaction – evaluating the transaction itself from an antitrust perspective
-Pre-closing – managing client conduct and the risk of “gun jumping”
-Due Diligence – what to look for
-Post-merger considerations for fostering and perpetuating a “Culture of Compliance”
-Managing compliance concerns that are discovered post-closing
The U.S. federal government has emerged as a major marketplace for business to pursue. Since 2001, the size of federal spending has more than doubled and political pressure has resulted in more of that spending going to outside companies (federal contractors) instead of government employees.
Firms are increasingly viewing the government as a viable customer. Unfortunately, selling to the U.S. government is very different than selling to commercial customers.
This presentation by Matthew Bennet, Vice president, Charles Rivers Associates, was made during the discussion “Hub-and-spoke arrangements” held at the 132nd meeting of the OECD Competition Committee on 4 December 2019. More papers and presentations on the topic can be found at oe.cd/hsa.
Running Head: INTERNATIONAL BUSINESS 2
International Business
Student Name
University Name
Date
Instructor Name
Discuss a “real world” MNC’s international strategy. The discussion should identify the company’s strategic plans, how the factors of international strategy, above, affected them, location efficiencies, a SWOT analysis, their application of the steps in international strategy formulation, and so on.
Support your paper with a minimum of five (5) external resources In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
INTERNATIONAL BUSINESS
Introduction:
Dawn of economic process has raised up, where international business is changing into more and more common. Transnational organizations will measure among the foremost profitable within the world. An organization must bear in mind of the speech and civilization of the country wherever it plans to board with its asset. Politics and laws of the condition will moreover produce international trade simple or onerous. With the achievement of international business, its outlook is polished, on a planet scale. Effective organization of international business process includes inexpensive organization of money, workers, expansion, advertising, and announcement. This is over and over again so the association, completion and organization of the operation go well. The long lope of international business is intense as fiscal process and therefore they would similar to for catholicity persistence. Even though the business goes globally there are some issues to be considered around as such
1. Social Issues
2. Ethical Issues
3. Labour Issues
4. Environmental Issues
Impacts of Political, Legal and Economic System:
Political, economic, and legal assortment and change within the international souk, and the way executive reply to the confront with data and considerate resulting not exclusively from the business regulation though conjointly from economic expansion, sociology, faith, topography, and the past. Early labors to tie together technology and take manufactured goods into foreign markets; the crash of dispersion catalysts like super language, script, print technology, transport innovation, transmit medium, electronic medium, and advertising institution; and consequently the appearance of recent companies will calculate to manage to level back the crash. Largely North America or Western Europe is that the specific regions were these impacts have taken place. Political modification happens as nations look for to ascertain stability and order.
Government Investigations and Enforcement ActionsPolsinelli PC
The fifth webinar presentation in the M&A Litigation Series examines compliance pitfalls associated with M&A transactions. We will discuss how to evaluate antitrust risks of a transaction. We also will address compliance concerns – such as antitrust, the Foreign Corrupt Practices Act, the False Claims Act, and export control issues – that could significantly impact the scope, duration, and magnitude of necessary due diligence. Finally, we will address post-merger considerations that could decrease the severity of a compliance concern if one were to arise after a merger or acquisition has been completed.
On our agenda:
-Pre-transaction – evaluating the transaction itself from an antitrust perspective
-Pre-closing – managing client conduct and the risk of “gun jumping”
-Due Diligence – what to look for
-Post-merger considerations for fostering and perpetuating a “Culture of Compliance”
-Managing compliance concerns that are discovered post-closing
The Federal Corrupt Practices Act (“FCPA”) prohibits a U.S. company or person from bribing foreign government officials to obtain a business advantage. Along with this seemingly simple restriction comes accounting and record keeping requirements with which companies must comply. The FCPA requires the implementation of a compliance program which addresses FCPA concerns and establishes an FCPA corporate policy. This webinar covers the basics of the FCPA, including an introduction to the regulators, both the SEC and DOJ, and recent communications to the public regarding the FCPA from these regulatory bodies. The standards for a compliance program review is analyzed, including what makes a program current and effective as well as how often the program requires review. The role of a compliance coordinator is discussed, as is record keeping, training, and retaliation. Finally, meals and entertainment, gifts, travel, charitable contributions, and hiring are all discussed with reference to recent government actions and legal decisions.
Part of the webinar series: Corporate & Regulatory Compliance Boot Camp 2022 - Part 1
See more at https://www.financialpoise.com/webinars/
Help, My Business is in Trouble! (Series: Restructuring, Insolvency & Trouble...Financial Poise
When a business becomes financially troubled, the business owner often experiences denial, paralysis, or both. Lenders commonly lose confidence and then trust in the business, as communications tend to break down, deadlines are missed, and promises are broken. Small business owners commonly have issued personal guarantees, so business failure can often lead to personal financial stress. The good news is the business and business owner usually has some options, and even some leverage. This webinar explains what a business owner should- and should not- consider and do when dealing with financial trouble. Specific topics include discussion of bankruptcy (Chapters 7 and 11); assignments for the benefit of creditors; and friendly foreclosures. This webinar provides the business owner and her advisors with an overview of various restructuring and liquidation methods, a framework for how to decide between them, and practical tips for traversing the difficult environment that is financial distress.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/help-my-business-is-in-trouble-2020/
According to the World Bank’s latest Ukraine Economic Update, Ukraine’s economy grew by 2.3 % in 2016 (after around 16% cumulative real GDP contraction in the previous two years) and grew by 2.4% in the first half of 2017. The recovery was supported by a bumper harvest and a pickup from low levels in manufacturing, construction, and key services.
Il tema delle sanzioni è ormai diventato costante nel dibattito quotidiano. Il fatto che i due paesi che subiscono un regime sanzionatorio siano da sempre molto importanti per gli operatori italiani ne fa un argomento di primaria importanza. Tuttavia, c’è dal punto di vista di che scrive, ancora molta confusione tra i vari regimi di sanzioni primarie, secondarie, controsanzioni etc.
A questo proposito volevamo proporre in breve qualche chiarimento sulle sanzioni Americane. Prima di tutto va chiarita la differenza tra sanzioni primarie e secondarie.
IFC є лідером у просуванні агрострахування як інструменту зниження ризиків та розширення доступу до фінансування. Шляхи збільшення доступу до фінансування сільськогосподарського сектору.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
In the Adani-Hindenburg case, what is SEBI investigating.pptxAdani case
Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
buy old yahoo accounts buy yahoo accountsSusan Laney
As a business owner, I understand the importance of having a strong online presence and leveraging various digital platforms to reach and engage with your target audience. One often overlooked yet highly valuable asset in this regard is the humble Yahoo account. While many may perceive Yahoo as a relic of the past, the truth is that these accounts still hold immense potential for businesses of all sizes.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
FIA officials brutally tortured innocent and snatched 200 Bitcoins of worth 4...jamalseoexpert1978
Farman Ayaz Khattak and Ehtesham Matloob are government officials in CTW Counter terrorism wing Islamabad, in Federal Investigation Agency FIA Headquarters. CTW and FIA kidnapped crypto currency owner from Islamabad and snatched 200 Bitcoins those worth of 4 billion rupees in Pakistan currency. There is not Cryptocurrency Regulations in Pakistan & CTW is official dacoit and stealing digital assets from the innocent crypto holders and making fake cases of terrorism to keep them silent.
FIA officials brutally tortured innocent and snatched 200 Bitcoins of worth 4...
The commercial distribution in the us market
1. THE COMMERCIAL DISTRIBUTION IN THE US MARKET
Despite facing challenges at the domestic level along with a rapidly transforming global landscape, the U.S. economy is
still the largest and most important in the world. The U.S. economy represents about 20% of total global output, and is
still larger than that of China. Moreover, according to the IMF, the U.S. has the sixth highest per capita GDP (PPP). The
U.S. economy features a highly-developed and technologically-advanced services sector, which accounts for about
80% of its output. The U.S. economy is dominated by services-oriented companies in areas such as technology,
financial services, healthcare and retail. Large U.S. corporations also play a major role on the global stage, with more
than a fifth of companies on the Fortune Global 500 coming from the United States.
Even though the services sector is the main engine of the economy, the U.S. also has an important manufacturing
base, which represents roughly 15% of output. The U.S. is the second largest manufacturer in the world and a leader
in higher-value industries such as automobiles, aerospace, machinery, telecommunications and chemicals.
Meanwhile, agriculture represents less than 2% of output. However, large amounts of arable land, advanced farming
technology and generous government subsidies make the U.S. a net exporter of food and the largest agricultural
exporting country in the world.
The U.S. is the 2nd leading exporter of goods and services in the world and the number one leading importer The U.S.
has consistently run a trade deficit, mainly due to the dependence on foreign oil to meet its energy needs and high
domestic demand for consumer goods produced abroad, however thanks to advances in domestic oil production, the
energy gap is closing. The main trading partners of the U.S. are Canada, China, Mexico and Japan. Canada is the main
destination for U.S. exports, whereas China is the main source of imports.
2. Before setting a real presence of the company in the US a company has to consider if it worths it. They have to
consider the cost of the presence as the cost of HR, staff, offices, insurances, consultants, compliance, the product
liability and the approach to the market, the Law, distances, consumers’ habits and if there’s a different language.
A company can consider different entry strategies and different organizational models.
About the distribution model, a company can distribute directly through a subsidiary in the US and it can be by agents
or by distributors, or directly by sales representatives or indirectly through third party distributors.
In the US a great importance is given to the written contracts. A company must consider also the brand protection,
eventual visas for the employees, the Law and the compliances to export products in the US.
Distribution models:
Distribution: a company buys the products and it earns with the mark up. In this model exists a market risk, there’s the
need of a warehouse and for these characteristics it’s an expensive model.
Agents: in this model the agents don’t buy and resell the products but they earn only a commission.
Franchise: the company has the license of the brand and it pays a “franchise fee”. There’s a control on the sales
process.
The written contracts in the US (distribution, agents, sales, joint ventures, etc) are very long due to cultural
motivations, litigation risk, freedom of bargaining, and because the Civil Code is less strict.
It is foundamental to prepare contracts to manage the following risks:
· In stores: prices, timing of payments, description of products or services, ownership, etc.
· Legal risks: warranties, compensation, dissolution, arbitration, etc.
A bound contract could be not written (verbal, purchase orders, email, correspondence).
In a contract there are fixed clauses:
1. Warranties: declared in the contract or implicit (Uniform Commercial Code, Article 2 for the trade of goods,
warranties for “merchantability” and “fitness for intended purpose”). The implicit ones are inaccurate in favor of the
buyer, often on the trade of specialized goods between merchants. They are applicable if they are not expressly
excluded (magic language).
2. Indemnification: area, restrictions, direct damages and indirect/consequential damages, lost profits.
3. Territory
4. Duration
5. Obligations of the distributors: objectives, minimum of selling, marketing, limits to distribution to authorised
retailers.
6. Resolution: predict causes which attribute rights of termination and generally the termination is required from
one part and it doesn’t give rise to compensation cause.
7. Autonomy: provide the total autonomy of the Italian Company in respect to the counterparty in order to avoid
the responsibility for act of the distributors or qualification of the counterparty as employer.
8. Antitrust: Vertical Restraints – Rule of Reason
3. How to choose the legal entity
The advantages of set up a new company (NewCo) instead of a branch in the US are that in the US the set up of a
NewCo is faster and cheaper than in Italy, there are less formalities, the disclosure is limited to the parent company
and the shareolders, there's the need of a minimal capitalization even if there’s a thin capitalization for credibility on
the market and with the Authorities. It’s important to decide where to open the New Co (Delaware vs other states).
Another aspect to consider is the kind of entity the company wants to set up: a Corporation or a Limited Liability
Company.
A Corporation is the most known legal and fiscal entity with limited liability. From the fiscal view it has a permanent
establishment and it doesn’t need to file the Income Tax Return of the parent company.
The hierarchy includes stakeholders, directors and officers and there’s also a Board of Directors (“The business and
affairs of the corporation shall be managed by, or under the direction of the Board of Directors”- Delaware GCA
Section 141a).
A Limited Liability Company has only a legal personality (“pass through”) and its consituition is more expensive but at
the same time it’s more flexible.
Distribution Agreements under US Law
(Excerpts from Chapter 19 of “International Commercial Agency and Distribution Agreements: Case Law and Contract
Clauses”, Second Edition, published on April 20, 2017 (Wolters Kluwer))
Understanding the interplay between federal and state statutory and common law in the US legal system is important
to understanding the regulation of exclusive distribution agreements in the US. Under the US Constitution all power
not specifically reserved for the federal government remains with the states. Federal law has exclusive jurisdiction
only over certain types of cases (e.g., those involving federal laws, controversies between states and cases involving
foreign governments), and share jurisdiction with the states courts in certain other areas. In the vast majority of cases,
however, state law has exclusive jurisdiction.
Furthermore, because a distributor is typically an unaffiliated third party acting on its own account rather than on
behalf of the supplier as principal, distribution agreements are subject to greater regulation under US federal and
state antitrust law. Such law, among other things, (i) regulates whether and the degree to which a supplier in a
distribution arrangement may seek in a contract or otherwise to dictate the price at which the distributor will resell
products supplied; (ii) imposes restrictions on suppliers that engage in “dual distribution”; and (iii) may limit the
suppliers’ ability to sell product to different distributors at a different price. Antitrust law also regulates exclusivity and
selective distribution arrangements, as well as distribution relationships in certain industries.
Under the law of most states (including New York), exclusive distribution exists when a supplier grants a distributor
exclusive rights to promote and sell the contract goods or services within a territory or to a specific group of
4. customers. Exclusive rights in a distribution arrangement are often granted by the supplier for the distribution of high
quality or technically complex products that require a relatively high level of expertise by the distributor, including
staff that is specially training to sell the goods or specialized after-sales repair and maintenance or other services. In
contrast to a distributor, a commercial agent does not take title to product, does not hold inventory and typically has
no contractual liability to the customer (including risk of customer non-payment). Conversely, a distributor, in line
with the greater risk of its activities, typically can expect greater upside economically in terms of margins on resale
relative to an agent’s profit through earned commissions.
Sub-distributors:
Under the law of most states (including New York), a distributor may appoint subdistributors absent any restrictions to
the contrary in the agency agreement. Commercially, the appointment of a sub-distributor may have an adverse effect
on the supplier by reducing the supplier’s control over its distribution channel activities or increasing the supplier’s
potential liability exposure given the increased number of distributors whose actions may be attributed to the
supplier.
Rights and Obligations of the Exclusive Distributor:
Sales organization: suppliers are not required to establish sales organizations in exclusive distribution agreements.
Sales’ target: there are no mandatory rules under federal law or state law (including New York) generally regarding
sales targets in exclusive distribution agreements.
Guaranteed minimum target: minimum sales requirements are common in exclusive distribution agreements. As a
commercial matter, a supplier as a requirement to give, or maintain, exclusivity with one distributor, will seek through
such requirements to ensure that economically the distributor is performing satisfactorily.
Minimum stock: there are no mandatory rules in federal law or the law of the majority of states (including New York)
regarding minimum stock. A supplier may seek to have the distributor agree, contractually, to maintain adequate
levels of stock relative to market demands as well as to store the product properly.
After-sales service: the parties to a distribution agreement are generally free to agree as they deem appropriate with
respect to after-sale service regarding products.
Resale Prices: the Exclusive Distributor is free to fix the resale prices. State law (including New York law) generally
does not limit the ability of an exclusive distributor to fix resale prices. A supplier’s ability to set resale prices for
distributors is subject to limitations under federal and state antitrust law.
Rights and Obligations of the Supplier:
Exclusive Distributor undertaking to supply: generally, state statutes do not specifically provide that a supplier in a
distribution relationship has a duty to supply specific levels of product to a distributor, with such obligations generally
be established by contractual provision. However, a supplier does have an implied covenant of good faith and fair
dealing toward the distributor under state law generally, which generally requires that a party to a commercial
agreement not do anything which injures the right of the other to receive the benefits of the agreement. Under the
foregoing, a supplier may be deemed to have an obligation to supply product to a distributor. However, even where
such a duty were found to exist, the quantity and frequency of product supply and other details often remain unclear.
Pricing Policy of the Supplier;
Retention of title: typically, in sales transactions on credit in the US, title is passed at the moment of initial sale. The
buyer typically grants the supplier a security interest in the goods purchased, which if proper perfected under state
law, affords the supplier with a priority position relative to other creditors with respect to the products provided
(inventory) in the event of non-payment and enforcement.
The supplier and distributor can allocate third-party liabilities and related attorneys fees as between themselves
through warranty and other indemnification provisions.
Exclusive-dealing provisions – under which the distributor undertakes not to distribute competing products in the
territory – are quite common in distribution agreements.
5. Commercial Agency Agreement under US Law
To understand the regulation of commercial agency agreements in the US, it is helpful to remember the interplay
between federal and state statutory and common law in the US legal system.
Commercial agency is regulated at the state level rather than by US federal law. Almost two-thirds of the US states
have adopted specific legislation for commercial agency relationships with non-employees. Most state statutes
regulating commercial agency relate to the relationship between a principal and an agent that solicits orders for the
purchase of the principal’s products, mainly in wholesale rather than retail transactions (although state law often has
special rules for agency relationships with respect to real estate transactions and insurance policies). A second,
overarching theme of note to understand the regulation of commercial agency agreements in the US is the primary
importance of the doctrine of freedom of contract under state law jurisprudence.
General Legal Provisions Applicable to Agency Agreements:
As noted, commercial agency is mostly regulated at the state level in the US State laws on agency mainly address
commissioned agency, and, where in force, is primarily aimed at ensuring that the principal timely pays the agent the
commissions that are owed by imposing liability on the principal for a multiple (often two to four times) of unpaid
commissions, as well as for reimbursement of the agent’s attorneys’ fees and costs incurred in collecting the unpaid
amount.
Formalities for the Creation of an Agency:
New York law does not impose particular formalities for the creation of an agency relationship. In fact, under New
York law, absent circumstances under which New York’s general Statute of Frauds rules apply as set forth in § 5-701 of
the General Obligations Law, parties may be deemed to be in an agency relationship even without signing an
agreement evidencing the agreement consideration or any writing which evidences their agreement. New York law
does regulate the payment of sales commissions under New York labor law. New York labor law defines a sales
representative as an independent contractor who solicits orders in New York for the wholesale purchase of a
supplier’s product or is compensated entirely or partly by commission.
Agency Elements and Purpose:
Under the law of New York and the majority of states, an “agent” is a person or entity who, by agreement with
another called the “principal,” represents the principal in dealings with third persons or transacts business, manages
some affair or does some service for the principal. The key elements of an agency are: (i) mutual consent of the
parties; (ii) the agent’s fiduciary duties, and (iii) the principal’s control over the agent. A principal may act on a
disclosed, undisclosed, or partially disclosed basis in dealing with third parties.
A defining element of agency under New York law and the law of the majority of states is the principal’s control over
the agent. Indeed, whether the principal will be bound by the agent’s acts will depend, in large part, on whether the
agent had actual or apparent authority to act on behalf of the principal. Two of the many factors taken into account in
6. determining whether such a relationship could be characterized as one of employment include whether the agent: (i)
provides the services according to her own methods and (ii) is subject to the control of the principal.
Appointment of Sub-agents:
Under New York law and the law of the majority of states, a principal may authorize an agent to appoint another
agent to act on the principal’s behalf. The second agent may be a subagent or a co-agent. A “subagent” is commonly
defined as a person appointed by an agent to perform functions that the agent has consented to perform on behalf of
the agent’s principal and for whose conduct the appointing agent is responsible to the principal.
Rights and Obligations of the Agent:
Generally, the following are the most important duties of the agent under state common law: (a). Agent must not act
outside of its express and implied authority. (b). Agent must use care, competence and diligence in acting for the
principal. (c). Agent must obey the principal’s instructions as long as they are legal. (d). Agent must avoid conduct
which will damage the principal’s business. (e). Agent must not act for an adverse party to a transaction with the
principal. (f). Agent cannot compete with the principal in the same business in which the agent acts in such capacity
for the principal without the principal’s consent. (g). Agent must provide the principal with information relevant to the
marketing of the principal’s products. (h). Agent must separate, account for and remit to the principal all collections
for the principal’s account and other property of the principal. (i). Agent must not receive compensation from any
third party in connection with transactions or actions on which the agent is acting on behalf of the principal. (j). Agent
must maintain the confidentiality of, and not misuse, the principal’s confidential information.
Rights and Obligations of the Principal:
The following are the most important duties of the principal under state common law: (a). Principals must promptly
pay terminated agents the commissions that they are owed; in most states, failure to pay can result in penalties,
including multiple-damages.
(b). Under the law of some states, an agency arrangement must be in writing, and certain formalities complied with,
for the agency arrangement to be binding.
State law generally does not contain mandatory provisions on exclusivity. Indirectly, certain rules (such as the Statute
of Frauds under New York law that requires that exclusivity provisions be in writing if they will exceed one year) may
apply. Otherwise, parties to a commercial agency arrangement generally may agree contractually on the terms of
exclusivity.
Franchise Agreements under US Law
The interplay between federal and state statutory and common law in the US legal system is important to
understanding the regulation of franchise agreements in the US. Franchise arrangements in the US are regulated at
the federal and state levels. At the federal level, franchise arrangements are regulated by the US Federal Trade
Commission (“FTC”) under the so called “FTC Franchise Rule,” while at the state level franchise arrangements are
typically regulated by state agencies. In New York, franchise arrangements are regulated by the New York Antitrust
Bureau under New York’s General Business Law. The FTC Franchise Rule applies everywhere in the US, while generally
state franchise legislation requires contact with the state.
Under the FTC Franchise Rule, a franchise exists if the following elements exist: (i) the franchisee is given the right to
distribute goods and services that bear the franchisor’s trademark, service mark, trade name, logo or other
commercial symbol; (ii) the franchisor has significant control of, or provides significance to, the franchisee’s method of
7. operation; and (iii) the franchisee is required to pay the franchisor (or an affiliate of the franchisor) at least US$USD
500 before (or within six6 months after) opening for business.
If a franchise is deemed to exist under the FTC Franchise Rule or under state law (and an exemption under such law is
unavailable), the franchisor is required to comply with requirements that generally fall into three categories:
disclosure laws, registration laws and relationship laws.
Formalities (registration, etc.):
Registration laws like disclosure laws are pre-sale laws. There is no federal registration requirement. However,
fourteen US states have registration laws (including California and New York). In the remainder of states, franchisors
that comply with the Franchise Rule’s disclosure requirements can sell in states that do not require registration
without having to file their document with any governmental authority.
Under most state registration laws, a franchisor must: (i) register in the jurisdiction before offering to sell or selling
franchises in the jurisdiction by filing its FDD (or FOP), plus various application forms with the jurisdiction’s applicable
regulatory agency, and (ii) update or renew its registration annually. As of 2016, franchise registration initial filing fees
range from USD $250 (Hawaii, Michigan, North Dakota and South Dakota) to USD$ 750 (New York).
A franchise agreement typically grants the right to operate the business using the franchisor’s marks and system at a
particular location and/or within a particular territory.
Sub-franchisee:
There are two typical structures for franchise agreements: (i) a one tier structure consisting of a franchise agreement
between a franchisor and a franchisee, or (ii) or a two-tier structure through a master franchise agreement where the
franchisor grants the right and imposes a duty on a franchisee to operate the franchise itself within a particular
territory, and to grant subfranchises to third parties within that territory.
Rights and Obligations of the Franchisee:
· Fees and Royalties: under a typical franchise arrangement the franchisee is required to pay the franchisor an up-
front franchise fee and royalties over time, in order to join the franchise network. Franchise fees can be large with a
substantial profit element, or smaller to assist the franchisee to set up the franchise in a target territory. Because a
franchise fee is a requirement under the FTC Franchise Rule and the laws of many states in order for a franchise to be
deemed to exist, there is considerable jurisprudence on the question of what is considered to be a “franchise fee” for
these purposes.
· Marketing: typically a franchisee is required by the provisions of a franchise agreement to undertake advertising
of the products in strict accordance with the franchisor’s instructions. A franchisor normally is prohibited from
carrying out advertisement and promotional activities in a manner that could harm the franchisor’s brand or is
inconsistent with the franchisor’s other advertising efforts.
· Compliance with the franchisor’s standards: maintenance of consistent appearance, operations and array of
products and services across multiple franchises is a hallmark of franchise arrangements in the US Most franchise
agreements require that franchisees strictly abide by specifications, standards and operating procedures, each of
which is built into the agreements. Given the difficulty of providing for all of these standards in a franchise agreement,
many franchise agreements afford franchisors the right periodically to modify and increase the applicable
specifications, standards (e.g., accounting) and operating procedures, usually by providing updates to the base
operating manual.
Rights and Obligations of the Franchisor:
(A) Communication of know-how: initial know-how that may be communicated from franchisor to franchisee often
relates to the specifications, standards and operating procedures that relate to the products to be sold and related
site that are built into franchise agreements, as discussed above.
(B) Ownership of improvements and modifications: franchise agreements typically contain acknowledgement by the
franchisee that the trademark (and intellectual property generally) licensed under the franchise agreement and all
related goodwill are property of the owner of the trademark (usually the franchisor). Therefore, all improvements to
such intellectual property are property of the licensor.
(C) Assistance to the benefit of the franchisee: there are no statutory obligations on the federal and state level for
initial or continuing assistance by the franchisor for the benefit of the franchisee.
8. Summary of Changes under U.S. Tax Law Affecting U.S. Subsidiaries of Non-U.S.
Manufacturing Groups
The 2017 Tax Cuts and Jobs Act (the "TCJA"), signed into law by President Trump on December 22, 2017, introduces
sweeping changes in U.S. tax law, affecting businesses of all kinds. This Practice Note focuses on a few key provisions
of the TCJA particularly relevant to non-U.S. manufacturing corporations with U.S. distribution subsidiaries. These
changes in U.S. tax law may impact these companies operate now, as well as future plans for entering the U.S.
market.
Federal Corporate Income Tax Rate:
Most significantly, the US federal corporate tax rate has permanently been reduced from 35% to 21%. In addition, the
corporate alternative minimum tax (which applied when higher than the regular corporate tax) has been repealed.
The reduction of the headline U.S. federal corporate tax rate to 21%, which is a lower rate than in many of the home
countries of non-U.S. corporations, will obviously benefit non-U.S. manufacturers with existing U.S. subsidiaries, and
may influence those who sell directly into the U.S. to consider forming US subsidiaries and expanding their U.S.
presence.
Under the TCJA, net business interest deductions are generally limited to 30% of "adjusted taxable income," which is
essentially EBITDA (taxable income plus depreciation and amortization deductions) for years 2018-2021 and EBIT
(taxable income without adding back depreciation/amortization). Disallowed interest expense is carried forward
indefinitely. Before the TCJA, interest was generally deductible when paid or accrued, subject to numerous limitations,
including debt/equity ratios and taxable income. U.S. corporations - other than small businesses (average annual
gross receipts under $25 million, on an affiliated group basis) - are subject to these limitations.
The TCJA's limitation on interest deductions are designed to protect the U.S. tax base. As a result, non-U.S.
manufactures with existing U.S. subsidiaries, and those planning to establish U.S. subsidiaries, may decide to reduce or
limit the amount of debt in their U.S. subsidiaries.
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