It’s been a while…my apologies! Waiting at an airport on a winter weather delay has me thinking of all the times I’ve been delayed because of summer weather like…lightning storms. It also gave me a chance to talk to a non-US company client about doing business here, and their structuring options; which also relates to my earlier post about when a company is deemed to be doing business here, for jurisdictional purposes.
In the context of forming a U.S. affiliate, I’m often asked by non-U.S. companies whether Delaware is the always the best jurisdiction to form an entity. My answer: not always.
Irish and Northern Irish businesses should realize that the formation of business entities in the U.S. is done at the state level, not the Federal level. While Delaware is an attractive jurisdiction for corporate law, it’s not a huge business center—at least not the size of New York, California, Illinois, Texas, etc. That leaves the Irish/NI parent with a choice: (i) form the legal entity in the state where it will do most of its business; (ii) form the legal entity in Delaware and register it as a ‘foreign’ corporation in the state where it will do most of its business. Continue reading
I spoke recently with the owner of an Irish company that sells its products online to purchasers in the US and other countries. The US isn’t a true focus of this company’s expansion efforts, but the US market is a nice added benefit to the company’s revenue stream. They don’t have a US-specific website, but if you go to their order page you can enter a US address for delivery. In discussing their sales efforts, I asked what the company does in terms of US-focused terms/conditions of sale and related agreements. Nothing, I was told, because the company isn’t ‘doing business’ in the United States. In a limited way, that answer is correct. But, that answer also is wrong, and dangerously so. Continue reading