” Legal Tender ” Does *Not* Mean that You Must Accept Cash
This post about legal tender is a bit off-topic for this blog. However, I am writing it because it clears up a common misunderstanding, about which I recently wrote on Quora. Please see On every US dollar bill the message “This note is legal tender for all debts public and private” is printed. How is it then legal for some businesses to not accept cash?
The U.S. Department of the Treasury discusses whether the “ legal tender ” language on U.S. currency requires that cash payments be accepted. Quoting a portion of Legal Tender Status (link and emphasis added): (more…)
At-will Employment – Why It Is the Norm in the U.S.
At-will employment permits either an employer or an employee to terminate their relationship at any time for almost any reason. This post explains why at-will employment is the norm in the U.S.
I am basing this post on a Quora question that I answered recently. Please see Why are labour laws governing companies almost non existent in North America, compared to Europe? (more…)
How can a Foreigner Open a Bank Account in the U.S.?
This post answers a question I have heard many times: How can a foreigner open a bank account in the U.S.?
Foreign entrepreneurs often ask this question. Because of the large market here, they want to start a business in the U.S. And because they want to do so effectively, they usually need a U.S. bank account. (more…)
Pitch Coaches Teach How to Sell in the US
In a recent article (Foreign Entrepreneurs Learn Art of the American Pitch), the Wall Street Journal discussed the role of “pitch coaches” who help foreign entrepreneurs promote themselves in the US. While the article focused primarily on pitches to investors, it applies to selling one’s business to clients and colleagues, as well.
The thrust of the article is that selling in the US is different from selling in other countries. In my work with international clients, I have seen the same thing.
Here are some of the ways that pitch coaches say pitches need to be tailored to work best in the US.
Independent Contractor Misclassification Can Be Expensive
I have written several times about potential undesirable consequences of misclassifying an employee as an independent contractor. It’s time for an update.
In 2012, California Labor Code Section 226.8 took effect. That statute is directed toward willful (i.e., voluntary and knowing) misclassification of employees as independent contractors. Consequences can include the following. (more…)
A. T. Kearney: US Seen as Best for Foreign Direct Investment
Last week, global management consulting firm A.T. Kearney released its 2013 Foreign Direct Investment Confidence Index. The major surprise: For the first time in more than a decade, senior executives in large companies chose the US as the most favorable place to make foreign direct investment (FDI).
According to Kearney, the US rose to the top for the following reasons:
- After downturn-induced cutbacks, companies are investing in productivity-enhancing tools and equipment.
- The dollar has weakened, while wages in developing countries have risen.
- Most notably, China slipped to second place because increasing labor costs raise questions about the long-term attractiveness of China’s development model.
Infographics Explain What the U.S. *Really* is Like
Cameron Booth’s Poster: Interstate Highway System as a Subway Map
I found a recent Quora post concerning Interesting Infographics about the U.S. quite entertaining. I realized it could be a quick way for international readers of this blog learn about Americans’ perceptions of the most important issues that they face.
The infographics address topics as diverse as: (more…)
Merchant Accounts in the U.S.for Foreign Companies – A Problem with Workarounds
I have helped dozens of foreign clients launch their businesses in the U.S. Almost every impediment to forming a corporation and running the business under that corporation can be overcome. But there’s one problem I have not been able to solve: Opening U.S. merchant accounts (for processing credit and debit card transactions) if companies does not have personnel in the U.S.
The first potential stumbling block is opening a bank account if the client has no U.S. personnel (and no home-country bank with an affiliate in the U.S.). See Post-formation Issues for Foreign Companies Coming to the U.S..
“Giant Cock” Excluded from Apple’s App Store
Yesterday, in San Francisco, I talked to one of the many foreign attendees at the Game Developers Conference. He told me about a game he had developed, which featured a giant rooster.
In the developer’s native language, the word for “rooster” is similar to the English word “cock”, so he called the game “Giant Cock” and submitted it to Apple’s App Store. Apple rejected the game without explanation. (more…)
Post-formation Issues for Foreign Companies Coming to the U.S.
Forming a corporation for a foreign client is a lot like forming a corporation for a domestic client. (See Foreign Companies: Form a Corporation when You Come to the U.S.) Having gone through the process dozens of times, however, I realize that there are three important post-formation issues that foreign clients often need help addressing: (more…)
What is a Derivative Work, and Why should I Care?
Marcel Duchamp’s derivative work of Leonardo’s Mona Lisa
On occasion I am asked about the extent to which a new work can incorporate elements of a pre-existing work without infringing the pre-existing work’s copyright. To answer such a question, one must understand derivative works.
17 U.S.C. Section 101 says (emphasis added):
A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a “derivative work”.
What’s in a Name? A Lot, if You’re a Corporation
In Act II, Scene II of Shakespeare’s Romeo and Juliet, Juliet wishes that she and Romeo could simply set aside their warring families, famously asking, “What’s in a name?” I thought about this question recently as I was helping a foreign client set up a corporation here in the U.S.
The foreign client is based in the U.K. It wanted to form a U.S. subsidiary with a similar name for brand-identification purposes. To avoid revealing the identity of the client, I will refer to it as “Amalgamated Widget Solutions, Ltd.” and the desired name of its U.S. subsidiary as “Amalgamated Widget Solutions, Inc.”
Are International Contracts Effective and Enforceable?
Flag of England (Yes, fellow Americans, there is an English flag separate from the UK flag – do you see the relationship?)
This post reproduces, almost verbatim, a Quora question and my answer. Q. How effective and enforceable are contracts between parties located in the United States and England?
A. Such agreements can be effective and enforced – agreements between parties in different countries are entered into routinely. (more…)
Ten Tips for Success in the U.S.
Having helped more than a dozen foreign companies set up operations here during the past few years, I am pleased to offer “Ten Tips for Success in the U.S.” on the Downloads page – just Sign Up for Free Downloads using the drop-down list in the sidebar.
Here are the titles of the ten tips, which are discussed in greater detail in the document:
- Work with complementary businesses that are already established here
- Manage overseas personnel on the principle “trust but verify”
- Form your corporation or limited liability company properly
- Be ready for a legal system that is different from the one back home
- Identify and protect intellectual property (IP) that is used here
- Develop detailed employee and independent contractor agreements
- Choose an accountant with international tax experience
- Be prepared to obtain a federal employer identification number
- Conduct due diligence on potential investors
- Agree on business terms before you prepare a written agreement
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
International Business and Agreements: Learning about Legal Culture
Over the years I have negotiated a number of international agreements, typically representing domestic clients. My more recent work with EU-based clients, however, has given me additional insights about the U.S. and other legal systems.
These clients have established technology businesses in Europe. Each recently set up operations here in the Bay Area and asked that I adapt existing agreements for use in the U.S. As I work with these clients, two differences between the U.S. and the European Union jump out at me.
Length of Agreements
First, in the U.S. we often have longer agreements. European contracts tend to rely on, and implicitly or explicitly incorporate, detailed statutory provisions that do not exist here in the U.S. Furthermore, agreements here tend to include more business details and legal protections in case the relationship sours and ends up in litigation. For example, one client shared its existing reseller agreement. I found the document charming in its brevity and the abundance of white space on the page. By the time I added everything that is considered normal here in the U.S., the new version had four times as many words!
Eminent Domain: The U.S. Giveth, the U.S. Taketh
A fundamental tenet of patent law is that the owner of a patent can preclude others from using or manufacturing inventions that the patent covers. Because of eminent domain, however, that there is a major loophole regarding the U.S. government.
Section 1498(a) of Title 28 of the U.S. Code says, in part:
“Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be action against the United States in the United States Court of Federal Claims for recovery of his reasonable and entire compensation for such use and manufacture.”
(Section 1498(b) provides similarly with respect to copyright infringement by the United States.) (more…)
