Andrae Marrocco (Partner, Toronto) and Daniel Ujczo (Partner, Columbus) presented at the recent Corporate Success in the US event on November 15, 2016 in Toronto.
The event is aimed at simplifying access to the US market through a series of short, high level presentations highlighting the most important issues to be addressed when considering US expansion including banking, accounting/tax, legal, government incentives, site selection and US government services.
Andrae’s presentation on legal considerations in crossing the border included discussion on the following steps:
- Do your due diligence. This includes products & services compliance, import/export requirements, feasibility analysis, business licenses and permits and other regulatory matters.
- Protect your intellectual property. If you intend to sell under a brand name, trademark registration should be a first step. However, intellectual property extends beyond trademarks (eg copyright and trade secrets).
- Structure correctly. Often overlooked, but undertaking robust corporate/tax structuring up front is critical. Most times it is tax and liability driven, and not a one-size fits all approach.
- Consider the business model (eg distributor, dealers, joint-venture, franchise, sales agent) and the regulatory requirements associated with the particular model of choice.
- Select the right partners. Conduct due diligence on potential partners (eg financial condition). Consider and map out your proposed arrangements (eg dealers, area developers, exclusivity etc.).
- Control the pen. Depending on bargaining position, taking the lead on drafting the arrangement aids in minimizing risk and achieving economically viable.
- Craft robust contract terms. The business terms of the deal should be reflected and enhanced by the terms of the arrangement. Consistency between arrangements is also critical.
- Employees and immigration. Employment laws in the US are not the same. Consider your proposed organization structure and whether you will be sending employees across the border.
- Other regulatory matters. Depending on your industry, there may be other regulatory matters that need to be addressed including product liability, cyber security, website terms etc.
- Engage cross-border counsel. Ensure that you work with legal representatives that understand business and law on both sides of the border.
Daniel Ujczo spoke on the recent US election results and the likely effect on trade between Canada and the US, and the North American economy generally.