United States Joint Ventures With International Partners
David W. Detjen
Price: $250.00 1100 pages. 1 Looseleaf Volume. Appendices. Index. Updated annually or when needed. Published April 2000.
ISBN-13: 978-1-57823-169-0 / ISBN-10: 1-57823-169-8
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| United States Joint Ventures With Intl. Partners $250.00 |
Chapter 1- Introduction
1.01 Why Enter Into a Joint Venture?
[1] Advantages for the American Partner
[2] Disadvantages for the American Partner
[3] Advantages for the Foreign Partner
[4] Disadvantages for the Foreign Partner
1.02 The Joint Venture as a Compromise
1.03 Some Basic Definitions
[1] "Joint Venture"
[2] "Joint Venture Vehicle"
[3] "Partners"
[4] "Treaty"
1.04 Checklist
Chapter 2 - Working with International Joint Venture Partners
2.01 Cultural Differences
[1] Formality
[2] Collegiality of Decision-Making
[3] Purpose of Contract Documents
2.02 Legal Differences
[1] Freedom of Contract
[2] Lack of U.S. code System
2.03 Differences in Negotiating Style
[1] Presence of Attorneys and Other Advisors
[2] Pace of Negotiations
[3] Aggressiveness
2.04 Differences in Business Perspective
[1] The Frequent American View
[2] The Frequent Foreign View
2.05 Know the Partner
Chapter 3 - Preliminary Procedures and Decisions in Structuring a Joint Venture
3.01 Confidentiality Agreement
[1] Reasons for a Confidentiality Agreement
[2] Contents of a Typical Confidentiality Agreement
[a] Precise Description of Information Disclosed
[b] Representation of Receiving Party
[c] Precise Description of Allowed Use
[d] Exceptions to Restrictions on Use
[e] Internal Procedures
[f] Return of Documentation
3.02 Should the Parties Utilize a Separate Joint Venture Vehicle or Another Relationship?
[1] Advantages of Not Using a Joint Venture Vehicle
[2] Disadvantages of Not Using a Joint Venture Vehicle
[3] Considerations if Joint Venture Vehicle Is Not Created
[a] Common Characteristics of Cooperative Arrangements
[b] Another Alternative: Equity Participation
[4] Assumption: Joint Venture Vehicle Preferred
3.03 Overview of U.S. Tax Ramifications for Join Ventures
[1] Transfer of Assets to a Joint Venture Vehicle
[a] Transfer of Assets to a Corporate Vehicle
[b] Transfer of Assets to a Partnership Vehicle
[c] Contributions by a U.S. Partner to a Foreign Entity
[2] Classification of Entities
[a] Corporation or Partnership?
[b] Limited Liability Companies
[3] Taxation of Joint Venture Operations
[a] Corporate Vehicle
[b] Partnership Vehicle
[4] Termination of the Joint Venture
[a] Liquidation of a Corporate Vehicle
[b] Liquidation of a Partnership Vehicle
[c] Sale of Interest in the Vehicle
3.04 Should a U.S. or Foreign Joint Venture Vehicle Be Created?
[1] Foreign Business Entities Having Limited Liability
[a] Stock Corporation
[b] Limited Liability Company
[2] Partnerships
[3] U.S. Business Forms and Concepts Not Transferable to Foreign Entities
3.05 Business Activity Abroad
[1] Possible Issues Because U.S. Party Is Involved
[2] Legal and Economic Considerations
[a] Generally
[b] Europe and 1992
[3] Political Risks
[4] U.S. Tax Ramifications of Foreign Activities
[a] Controlled Foreign Corporation
[b] Foreign Personal Holding Company
[c] Personal Holding company
[d] Foreign Tax Credits
[e] Other Tax Implications
[f] Reporting Requirements
3.06 What Law Should Govern the Contracts and Legal Relationships?
[1] U.S. Law in Regard to U.S. Activity
[2] Dispute Resolution in a Foreign Jurisdiction
[3] Who Should Draft the Contracts and in What Language Should the Contracts Be Drafted?
[4] Possible Compromises Among the Partners
[5] Contract Documents as an Agenda or Checklist
3.07 Which U.S. Form of Business Entity to Be Used:
Corporation of Partnership?
[1] Corporation
[a] Advantages
[b] Disadvantages
[2] Partnerships
[a] Advantages
[b] Disadvantages
3.08 Tax Considerations in Choosing Between the Corporation and Partnership Forms
[1] Tax Attributes of the Partnership
[a] U.S. Tax Considerations
[b] Foreign Tax Considerations: Double Taxation Treaties
[2] Tax Attributes of the Corporation
[a] U.S. Tax Considerations
[b] Foreign Tax Considerations: Double Taxation Treaties
[3] Steps in Tax Analysis
3.09 Defining the Scope of the Joint Venture Business
[1] Preliminary Point: Internal Coordination
[2] Issues in Defining the Scope of the Joint Venture
[a] Issues in Regard to Existing Products and Services
[b] Issues in Regard to Development of New Products and Services
[c] Defining the Markets for the Joint Venture Vehicle
[d] Supply Relations and Logistical Support
[e] Carve-Outs
[f] U.S. Legal Constraints on Foreign Investors
3.10 Financing Issues
[1] Methods of Financing
[a] Partner Contributions and Loans
[b] Partner Guarantees
[c] Bank Loans
[d] Venture Financing
[e] Asset Financing
[f] Industrial Revenue Bonds
[g] Public Offering
[h] Official or Quasi-Official Financing
[2] Foreign Financing
3.11 Antitrust Considerations
[1] U.S. Antitrust Issues
[2] Hart-Scott-Rodino
[a] Certain Definitions
[b] Various Tests
[i] Commerce Test
[ii] Size-of-the-Parties Test
[iii] Size-of-the-Transaction Test
[c] Rules for International Joint Ventures
[d] Assistance
[3] Antitrust Considerations in Foreign Jurisdiction
[a] Example: German Notification Requirements
[b] European Community Considerations
3.12 Agreements and Documents to Be Negotiated
Chapter 4 Drafting the Formation Agreement
4.01 Name and Purpose
4.02 Kind of Entity
[1] What State Law?
[2] Should a New or Existing Corporate Entity Serve as the Joint Venture Vehicle?
4.03 Capital Contributions
[1] Cash Contributions
[2] In-Kind Contributions
[a] Tax Implications of In-Kind Contribution
[b] Representations Regarding In-Kind Assets
[c] Contributing entire Business
4.04 Representations of the Partners Themselves
4.05 Interim Covenants
4.06 Conditions to Closing
[1] Legal and Logistical Prerequisites
[2] Preservation of Status Quo
4.07 Post-Closing Adjustments
4.08 Termination of the Formation Agreement
4.09 Damages After Closing: Indemnification
4.10 Resolution of disputes
[1] Litigation
[a] Jurisdiction
[b] Nature of Legal Proceedings
[2] Arbitration
[a] Arbitration Possibilities
[i] American Arbitration Association
[ii] International Chamber of Commerce
[iii] London court of Arbitration
[b] Enforceability
[3] Other, Less Formal Procedures
[a] Executive Review
[b] Mediation and Conciliation
[c] "Minitrial"
[4] Uniform Procedures for Dispute Resolution
4.11 Other Issues
[1] Governing Law
[2] Notice
[3] Survival of Formation Agreement
[4] Follow-Up After Closing
4.12 Checklist of Additional Matters
Chapter 5 Establishing a Corporate Joint Venture Vehicle
5.01 Nature of a U.S. Corporation
5.02 State of Incorporation
5.03 Qualification
5.04 Article of Incorporation
[1] Name
[2] Election to Become Close Corporation
[3] Registered Agent
[4] Purpose Clause
[5] Capitalization
[6] Preemptive Rights
[7] Special Majorities for Certain Actions
[8] Limitations of Directors’ Liability
[9] Cumulative Voting
[10] Other Provisions
5.05 By-Laws
[1] Calling and Convening Meetings
[2] Quorum for Meetings
[3] Number of Directors
[4] Committees of the Board of Directors
[5] specifying the Scope of the Officer’s Authority
[6] Indemnification
[7] Share Certificates
[8] Amending the By-Laws
5.06 Shareholders Agreement
[1] Adoption of Articles of Incorporation and By-Laws
[2] Additional Capitalization
[a] Mutual Agreement
[b] Third Party or Other Objective Determination
[c] Consequences of Noncompliance with Determined Procedure
[d] Of Shareholder Loans
[e] Procedures for Loans
[3] Procedures for Selection of Board Members
[a] Odd or Even Number of Directors?
[b] Uneven Representation on the Board
[c] Procedures for Electing Board Members
[4] Selection and Removal of Officers
[5] Actions Subject to Shareholder or Board Approval
[a] Protection of Minority Shareholders
[b] Supervision of Officers
[6] Noncompetition Covenants
[7] Restrictions on Transfer of Stock
[a] Reasons for Regulation of Transfers
[b] Right of First Refusal
[c] Puts and Calls
[d] Pricing
[e] Exceptions to Transfer Restrictions
[f] Procedural Issues
[8] Dividend Policy
[9] Term and Termination
[a] One Possibility: Termination
[b] One Alternative: Continuation
[c] Transfer in Kind
[d] Change of Corporate Name
[10] Miscellaneous Provisions
[a] Choice of law
[b] Resolution of Disputes
[C] Notice
[d] Assignability
[e] Interest
[f] Partner’s Access to Records
[g] Confidentiality Obligation
[h] Severability and Further
[i] Joint Venture Vehicle as Party
5.07 Operations of the Joint Venture Vehicle: General Concepts
[1] Preserving the Corporate Veil
[2] Functional and Logistical Independence
Chapter 6 Establishing a Partnership Joint Venture Vehicle
6.01 The nature of U.S. Partnerships
[1] Flow-Through of Liability
[2] Management Structure of a Partnership
[3] Instability of Partnerships
[4] Summary: Recognizing the Limitations of a Partnership
6.02 Basic Tax Considerations in Structuring Partnerships
[1] Necessary Attributes of a Partnership
[2] Tax Implications for the Foreign Partner
[3] Consequences or Transfers of Partnership Interest
6.03 Organization and Qualification of the Partnership
6.04 Important Aspects of Partnership Agreements
[1] Definitions
[2] Formal Declaration of Partnership
[3] Name of Partnership
[4] Business of the Partnership
[5] Term of the Partnership
[6] Capital contribution and Capital Accounts
[a] In-Kind Contributions
[b] Interest on Accounts
[c] Additional Capital or Other Funding
[7] Allocation of Profit
[8] Distributions of Income
[9] Management of the Partnership
[a] Managing Partner
[b] Individual Manager
[c] Corporate Management
[d] Limited Partnership Form
[10] Other Aspects of Internal Management and Operation of the Partnership
[11] Dissolution of the Partnership
[a] Creation of Purchase Rights
[b] Withdrawal and Accounting
[c] Distribution in Kind
[12] Transferability of Partnership Interest
[13] Termination of the Partnership
[a] Procedure for Termination
[b] Transfer of Business Upon Termination
[14] Miscellaneous Provisions
[a] Choice of Law
[b] Resolution of Disputes
[c] Notice
[d] Noncompetition
[e] Interest Rate
[f] Indemnification
[g] Change of Name
Chapter 7 Establishing an LLC Joint Venture Vehicle
7.01 The Historical Background of LLCs
7.02 Common Characteristics of LLCs
[1] Limited Liability
[2] Tax Implications
[3] Management Structure
[4] Transfer of LLC Interests and Dissociation
7.03 Organization and Qualification of the LLC
[1] Organization
[a] State of Organization
[b] Organization Procedure
[2] Qualification
7.04 Important Aspects of LLC Operating Agreements
[1] Definitions
[2] Limited Liability
[3] Name of the LLC
[4] Business of the LLC
[5] Term of the LLC
[6] Capital Contributions and Capital Accounts
[a] In-Kind Contributions
[b] Additional Capital or Other Funding
[7] Allocation of Profits and Losses
[8] Distributions of Income
[9] Management of the LLC
[a] Member Management
[b] Manager Management
[c] Corporate Management
[10] Other Aspects of Internal Management of the LLC
[11] Dissolution of the LLC
[a] Procedures for Winding Up
[b] Transfer of Business Upon Dissolution
[12] Purchase and Sale Rights
[13] Miscellaneous Provisions
[a] Choice of Law
[b] Resolution of Disputes
[c] Notice
[d] Non-Competition
[e] Interest Rate
[f] Indemnification
[g] Change of Name
Chapter 8 Drafting Ancillary Agreements
8.01 Distribution or Supply Agreements
[1] Tax Implications
[2] Antitrust Considerations
[3] Important Contractual Provisions
[a] Product Definition
[b] Legal Relationship of Joint Venture Vehicle
[c] Term of the Agreement
[d] Territory
[e] Degree of Exclusivity
[f] Sales Promotion and Other Duties of the Joint Venture Vehicle
[g] Reporting and Information Requirements
[h] Terms of Sale and Delivery
[i] Pricing
[j] Payment Terms
[k] Security for Payment
[l] Warranty Obligations
[m] Product Liability
[n] Licensing Provisions
[o] Termination
[p] Miscellaneous Provisions
[i] Choice of Law
[ii] Resolution of Disputes
[iii] Notice
[iv] Interest
[v] Attorneys’ Fees
[vi] Supplier’s Warranty
[vii] Assignability
[4] Warranty and Product Liability
[a] Warranties
[b] Product Liability
[c] Steps to Take to Manage Exposure to Warranty and Product Liability
[5] Legal Relations with Dealers
7.02 Licensing Agreements
[1] Preliminary Considerations
[a] Forms of Licensed Property
[i] Trademarks
[ii] Patents
[iii] Trade Secrets
[iv] Technical Assistance
[v] Copyrights
[b] Anticipating Changes of Circumstances
[2] Tax Considerations
[3] Important contractual Provisions
[a] Specifying the Subject Matter of the License
[i] Trademarks
[ii] Patents
[iii] Trade Secrets
[iv] Copyrights
[v] Technical Assistance
[b] Scope of License Grant
[c] License Back
[d] Term of Licensing Agreement
[e] Advertising and Promotion Obligations
[f] Reporting Requirements
[g] Royalty Payments
[h] Royalty Payment Procedures
[i] Warranties
[i] Non-infringement
[ii] Utility or Efficacy
[j] Handling of Infringement Claims
[k] Termination
[l] Consequences of Termination
[m] Other Issues
[i] Use of Technology by Other Partners
[ii] Choice of Law
[iii] Correlation with Confidentiality Agreement
7.03 Employment Relationships
[1] Nature of American Employment Relationships
[a] Advantages for Employer of Employment Contracts for Certain Employees
[b] Disadvantages for Employer of Employment Agreements
[2] Visa Matters
[3] Tax and Related Issues in Regard to Bringing
Foreign Employees into the United States
[a] Tax Liability
[b] Social security
[c] Foreign Nationals and Pension Plans
[4] Severance Issues
[5] Important Contractual Provisions
[a] Description of Employee’s Responsibilities
[b] Term and Termination
[c] Salary and Incentive Pay
[d] Disability
[e] Other Compensation and Benefits
[f] Confidentiality and Proprietary Information
[g] Covenants Not to Compete
[i] Geographic Area
[ii] Scope of Prohibited Activities
[iii] Duration of Covenant
[h] Employee Representations
[i] Indemnification
[j] Choice of Law
7.04 Terms and Conditions of Sale
Forms
Form 1: Sample Confidentiality Agreement
Form 2: Form 5471: Information Return of U.S. Persons with respect to
Certain Foreign Corporation
Form 3: Form 90-22.1: Report of Foreign Investment Disclosure Act Report
Form 4: Form ASCS-153: Agricultural Foreign Investment Disclosure Act Report
Form 5: Commerce Department Reports
[1] Current Reporting Requirements for Foreign Investment
in the United States
[2] Form BE-13: Initial Report on a Foreign Person’s Direct
or Indirect Acquisition, Establishment, or Purchase of
the Operating Assets of a U.S. Business Enterprise,
Including Real Estate
[3] Form BE-13: Supplement C: Exemption Claim, Form BE-13
[4] Form BE-14: Report by a U.S. Person Who Assists or
Interviews in the Acquisition of a U.S. Business Enterprise
By or Who Enters Into a Joint Venture With a Foreign Person
[5] Form BE-15 (LF): Annual Survey of Foreign Direct Investment
in the U.S.-1991 (Long Form)
[6] Form BE-15 (SF): Annual Survey of Foreign Direct
Investment in the U.S.-1991 (Short Form)
[7] Form BE-605: Transactions of U.S. Affiliate, Except an
Unicorporated Bank with Foreign Parent
[8] Form BE-606B: Transactions of U.S. Banking Branch of
Agency with Foreign Parent
Form 6: Antitrust Improvements Act Notification and Report Form for
Certain Mergers and Acquisitions
Form 7: Sample Formation Agreement
Form 8: Checklist for Setting Up a Joint Venture Vehicle
Form 9: Sample Articles of incorporation for a Joint Venture Corporation
Form 10: Sample By-Laws for a Joint Venture Corporation
Form 11: Sample Shareholders Agreement for a Joint Venture Corporation
Form 12: Sample Partnership Agreement for a Joint Venture Partnership
Form 13: Sample Distributionship Agreement for a Joint Venture Arrangement
Source Materials
Item 1: Hart-Scott-Rodino Rules for International Joint Venture
(16 C.F.R. §802.50-53)
Item 2: American Arbitration Association’s Commercial Arbitration Rules
Item 3: UNCITRAL Arbitration Rules
Item 4: United Nations Convention on Contracts for the International Sale of goods
Item 5: Overview of Nonimmigrant and Immigrant Visas