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Create a 6 page essay paper that discusses International Business Law.Download file to see previous pages... Some of the most common means under the present state of international business law are as
Create a 6 page essay paper that discusses International Business Law.Download file to see previous pages...
Some of the most common means under the present state of international business law are as follows:
1. Direct foreign sales - This is the present strategy of Hampstead, which is to sell directly to a foreign buyer (exportation). This option may not be applicable because our Company seems to have decided to set up a plant outside UK.
2. Licenses and franchises - This is typically accomplished by a licensing agreement. A license permits the licensee to exploit the subject matter of the license for a specified purpose and for a specified time. This option may not be applicable to our company the facts fails to indicate possibility.
3. Distributorships - In here, there is an agreement to market our company's products through the sales efforts of a foreign-based distributor. Under this arrangement, a distributor is free to develop the target market in any manner in which it sees fit. i.e., it is free to buy and sell for its own account, maintain inventories, and sell at prices it sets. In addition, foreign distributors sometimes receive added protection under local law. Another advantage is that a distributor may limit the supplier's (Hampstead, in this case) exposure to local tax and labor laws. The option seems to be one of our options with our plan in transporting the cars from UK to Mexico and just have a company based in Mexico to distribute our products.
4. Direct foreign investment - A domestic company may conduct international business through a subsidiary located in the foreign country. We know for a fact that a subsidiary corporation, typically, is one whose shares (typically, a majority of the voting shares, i.e., >.50%) representing control of the corporation are owned by another corporation (the parent)." This option is also one that is currently considered by board. Hence, I like to point out that there is suggestion for having a wholly owned subsidiary to be controlled by our U.K. head office. Hence, this option may not allow it. However, we have the next option.
5. Branches - A branch is not a separate entity but is an extension of the domestic (e.g., U.S.) enterprise (e.g., corporation) in a host (i.e., foreign) country. It is also a practice that the enterprise might establish an operational spot in a host country, which requires direct investment in, for example, the following:
1) A research and experimental facility
2) A manufacturing plant for local sales and/or export
3) An operation that establishes a market and sales for its products and/or those of other enterprises
It also mentioned the following relevant factors to operating in a host country using a branch:
1) A branch allows unqualified control as compared to operations by a subsidiary.
2) The form of a separate legal entity is not present to limit contractual or tort liability.
3) Risks of loss due to changes in host country governments are like as those associated with direct investment. This option seems to be applicable, if our Company will desire to have a 100-percent control of the decision-making. However, I have still a last option in the next.
6. A joint venture - Although a joint venture is usually thought of as a partnership, it may be engaged in by means of a corporation or other organizational form.