Legal Structure of the New Business

Scope of Business

Governing Structure

• Percentage ownership

• Cooperation at the policy and operating level

Investment

• Form of investment (know-how, technology, brand equity, equipment, land, cash and so on)

• Total investment and/or capital contribution

Production

• Goods and/or services to be produced and/or provided

• Location of production facilities

• Required production capacity

• Required office space

• R&D budget

• Quality management and standards

Management and Staffing

• The CEO (should come from one of the parents but be able to win both parents' confidence)

• Board of Directors (total number, number of appointees of each parent, frequency of meetings)

• Governance policies (regulatory compliance, board policies)

• Other key positions (who appoints what members of the management team and responsibilities for each position)

• Expatriates (legal, living and working arrangements)

• Delegation of authority, reporting structure

Technology and Intellectual Property Transfer

• Technology transfer (patents, copyrights, know-how, trade secrets)

• Specifics on technology to be transferred

• Training and technical assistance

Marketing

• Marketing strategy

• Office space required for and location of sales and branch offices

• Share or products/services to be sold at the local and international market

• Marketing budget

International Business Procedures

• Requirements for local or imported raw materials and components

• Foreign currency requirements

• Taxes and import duties

• Regulatory approval process (cost, timing requirements)

Contracted Services

• Product/service development

• Marketing support

Revenue Sharing

• Dividend policy

• Royalties or transfer fees

Accounting and Control Methods

• Level of detail in cost accounting required

• Information required for venture control

• Frequency and level of detail required for accounting reports

• Choice of auditor