国际商法第五版第四章PPT——ray·august著

1、 2009 Pearson Education, Inc publishing as Prentice Hall4-1CHAPTER 4THEMULTINATIONALENTERPRISE 2009 Pearson Education, Inc publishing as Prentice Hall4-2CHAPTER 4CHAPTER 4THE MULTINATIONAL ENTERPRISETopics for this chapter:lStrategies for Doing Business GloballylThe Business FormlThe Multinational O

2、rganizationlInternational Regulation of Multinational EnterpriseslHome State Regulation of Multinational EnterpriseslHost State Regulation of Multinational Enterprises 2009 Pearson Education, Inc publishing as Prentice Hall4-3Strategies for Doing Business Globally: Exporting and ImportinglExporting

3、does not require having a subsidiary in a foreign nation, nor does it require a joint venture or partnership with a foreign business entity.lExporting creates issues of transportation, financing, contracting, and obtaining correct export licenses.lAn exporter will need an export manager, foreign sal

4、es agent, or a foreign distributor.Cargo ship loaded for another oceanic crossingDrawing used with permission of M. Nicole 2009 Pearson Education, Inc publishing as Prentice Hall4-4Strategies for Doing Business Globally: Branches & Subsidiaries lBranch offices can be set up by foreign companies

5、in the US by registering with the appropriate state agency.lA company may hire a foreign agent to act as a company representative. The agent may:Conduct market analysisEngage in product promotionServe as an import representative lThe laws of the host country determine what an agent may or may not do

6、.lCompany is not subject to foreign nations regulations when all they have is an agent. 2009 Pearson Education, Inc publishing as Prentice Hall4-5Strategies for Doing Business Globally: Bank BrancheslChina Merchant Bank has received approval from the Federal Reserve to open a NY branch.lWith the hei

7、ghtened threat from unstable banks, the Federal Reserve is tightening the application process to establish foreign branches in the U.S.lThe foreign parent bank must be subject to comprehensive supervision by banking authorities in the home country. 2009 Pearson Education, Inc publishing as Prentice

8、Hall4-6Licensing Intellectual Property and FranchisinglLicensing a companys intellectual property rights is a common way to gain entry into a foreign market.lA license is a contractual grant of a legally recognized right.lIn addition to allowing use of material that is protected by patent, trademark

9、, or copyright, the licensee may also be allowed to use:trade secretstrade dresstechnological methods, or business plans and processes. 2009 Pearson Education, Inc publishing as Prentice Hall4-7The Business Form:In Civil Law StateslIn civil law states, every form of business organization is a compan

10、y.lA company is an association of persons or of capital organized for the purpose of carrying on a commercial, industrial, or similar enterprise. These companies may be a corporation or a partnership. 2009 Pearson Education, Inc publishing as Prentice Hall4-8Business Forms in Civil Law States lIn so

11、me civil law states like France, all companies are viewed as juridical entities, meaning they have a legal existence independent of their owners.lIn Germany and the US, corporations are juridical entities, but partnerships are not. lA partnership is a company of two or more persons who co-own and ma

12、nage a business and are each liable to the full extent of their personal assets. 2009 Pearson Education, Inc publishing as Prentice Hall4-9Civil Law PartnershipslIn a limited partnership, at least one partner must be a general partner with unlimited personal liability for the debts of the business.

13、There must also be at least one limited partner who is liable only up to the amount of their investment.lSome countries allow silent partnerships where one partner carries on the business in his or her own name without revealing the participation of a limited liability partner. 2009 Pearson Educatio

14、n, Inc publishing as Prentice Hall4-10Civil Law CorporationslTwo basic types of civil law corporations:1.Stock corporation: Can raise money in the public marketplace through the sale of freely transferable shares. Financial statements must be disclosed to the public.a.Articles of Incorporation: inst

15、rument creating and defining a particular corporation. Must be filed with state agency at time of formation. 2009 Pearson Education, Inc publishing as Prentice Hall4-11Formation of Stock Corporationb.By simultaneous incorporation, promoters form a syndicate to purchase the shares. Only after formati

16、on are the shares sold to the public.c.A minimum capitalization is required. Civil law states generally do not recognize authorized but unissued shares. Entire capital must be subscribed before formal organization. 2009 Pearson Education, Inc publishing as Prentice Hall4-12Formation of Stock Corpora

17、tiond.Once subscriptions have been paid, board of directors are elected at organizational meeting.e.After registration of Articles of Incorporation and notice of registration is published, the stock corporation comes into existence.f.Must be more than one subscriber, but shares can be transferred to

18、 anyone. France requires at least seven shareholders. 2009 Pearson Education, Inc publishing as Prentice Hall4-13Formation of Stock Corporationg.Once subscriptions have been paid, board of directors are elected at organizational meeting.h.After registration of Articles of Incorporation and notice of

19、 registration is published, the stock corporation comes into existence. 2009 Pearson Education, Inc publishing as Prentice Hall4-14Formation of Stock Corporation i. Shareholders:1)Elect board of directors2)Review annual statements3)Declare dividendsj.Quorum: Number of persons or number of total shar

20、es represented, that must be present at a meeting for official action to be taken.k.Financial statements are public. 2009 Pearson Education, Inc publishing as Prentice Hall4-15Civil Law Corporations2.Limited Liability Company: A corporation that does not issue negotiable share certificates and is su

21、bject to minimal public disclosure laws.a.Popular corporate business entity.b.Widely used for setting up subsidiaries.c.Formation is similar to corporate formation in France and Germany. The LLC files Articles of Incorporation, capital is subscribed, organizational meeting is held, board of director

22、s is elected, articles are registered. 2009 Pearson Education, Inc publishing as Prentice Hall4-16Limited Liability Companiesd.Minimum required capitalization varies from country to country.e.Investors are called members, not shareholders.f.Members do not own shares, they own a participation.g.Membe

23、rs meet informally if agreed.h.Transferring ownership is difficult and may be subject to right of first refusal of other members to purchase. 2009 Pearson Education, Inc publishing as Prentice Hall4-17Business Forms in Common Law States: lCommon law states include England, the US, and British Common

24、wealth countries.lCommon Law Partnerships:Association of two or more persons who co-own and manage a business for profit.Each partner is liable to the full extent of their personal assets for debts.Not a tax-paying or juridical entity.Income of partnership is allocated to partners as personal income

25、. 2009 Pearson Education, Inc publishing as Prentice Hall4-18Common Law PartnershipsLimited Partnership Consisting of one of more general partners who manage the business and are liable to the full extent of their assets and one or more limited partners whose liability extends only to the amount of

26、their investment.Limited partnership is not a juridical entity. Secret partnership participation of one or more partners is not disclosed to the public. All of the partners have unlimited personal liability. 2009 Pearson Education, Inc publishing as Prentice Hall4-19Common Law Partnerships: The Limi

27、ted Liability CompanylRecognized only in the United States.lThe LLC is an unincorporated association that is treated as a partnership for tax purposes and provides limited liability for its members.lPopular because not subject to corporate taxation.lMembers in LLC may participate in management witho

28、ut subjecting themselves to personal liability. 2009 Pearson Education, Inc publishing as Prentice Hall4-20Limited Liability CompanylMay delegate management to managers who do not need to be members of the LLC. lFormed by filing Articles of Organization with the state.lMust file yearly report but pa

29、ys no yearly franchise tax or income tax.lManagement set out in Operating Agreement that is not a public document. Agreement deals with voting rights, right to distributions, and restrictions on transfer of members interests. 2009 Pearson Education, Inc publishing as Prentice Hall4-21Common Law Busi

30、ness Trust lBusiness arrangement that exists only in the US in which:Owners of a property, known as beneficiariesTransfer legal title to that property to a trusteeTrustee manages property for themBeneficiaries hold transferable trust certificates entitling them to income generated by the property an

31、d a residual equitable share at the time the trust is terminatedTrustee has unlimited personal liabilityBeneficiaries have limited liability 2009 Pearson Education, Inc publishing as Prentice Hall4-22Common Law CorporationslThe three kinds of common law incorporated business entities are:Public corp

32、orationsPrivate corporationsLimited liability companieslSome common law countries also recognize:Unlimited liability corporationsNo liability corporations 2009 Pearson Education, Inc publishing as Prentice Hall4-23Public CorporationslRecognized throughout the common law world.lOrganized by filing tw

33、o documents:1.Memorandum of Association describes the basic details of the firm.2.Articles of Association describe the internal regulations of the corporation.lIn England, only two subscribers are needed but there is a minimum capitalization requirement of 50,000. 2009 Pearson Education, Inc publish

34、ing as Prentice Hall4-24Public CorporationslIn the US, there only has to be one subscriber and there is no minimum capitalization requirement.lMay issue a larger number of shares than are needed to start. Authorized but unissued shares are allowed in addition to the issued shares that constitute the

35、 corporations capital.lPar shares are the only shares allowed in England.lNo par shares are the norm in the US. Their price is set by the board of directors. 2009 Pearson Education, Inc publishing as Prentice Hall4-25Public Corporations: StocklStock issued in US and England can be classified.lPrefer

36、red stock Entitles owners to:guaranteed dividendpriority at the time of liquidationpriority over common shareslThe U.S. allows cumulative voting, a system of voting by which a voter, having a number of votes equal to the offices to be filled, may split their vote as they see fit. 2009 Pearson Educat

37、ion, Inc publishing as Prentice Hall4-26Public Corporations:Shareholder MeetingslFormal shareholder meeting required in England while actions in the US can be by written consent rather than at a formal meeting.lQuorum for meetings:England two shareholdersUS simple majority of voting shares, though A

38、rticles of Incorporation may set at lesser amount, such as a third or a fourth of voting shares. 2009 Pearson Education, Inc publishing as Prentice Hall4-27Public Corporations:Shareholder MeetingslIn US, board of directors may set dividends subject to requirements that:1.The corporation be solvent.2

39、.Issuance does not violate the Articles of Incorporation.3.The source of the dividends be of a certain type (i.e., earnings surplus). 2009 Pearson Education, Inc publishing as Prentice Hall4-28Private CorporationslCorporation that may not ask the public to subscribe to its shares, bonds, or other se

40、curities. It is subject to less stringent public disclosure laws.lIncorporation documents usually restrict transfer of shares.lIn US, these small corporations are known as close or closely held corporations. 2009 Pearson Education, Inc publishing as Prentice Hall4-29Advantages of Private or Closely

41、Held CorporationslAdvantages of organizing as close corporation:May dispense with many corporate formalities.In England, may appoint a single director instead of a board.Shareholder may grant proxy rights. In US, may entirely dispense with board of directors and corporation run by shareholders.lUnli

42、mited liability company Only in England and Commonwealth countries.Members are liable in the event that it is wound up and assets are insufficient. 2009 Pearson Education, Inc publishing as Prentice Hall4-30Importance of Separate Legal IdentitylImportant consequences of the separate legal identity o

43、f juridical entities:Liability of owners is limited to their investment.Rights and benefits accruing to the company belong to the company, not the owners. The company can own its own property, trade secrets, formulas, etc.Owners are neither managers nor agents nor representatives of the company. The

44、y cannot act for the company or create liability for the company by their actions. 2009 Pearson Education, Inc publishing as Prentice Hall4-31Case 4-1Case Concerning Barcelona Traction, Light & Power Co. (Belgium v. Spain)lBarcelona Traction (BT) was Canadian corporation injured by the actions o

45、f Spain. Alleged 88% of shareholders were Belgian.lCanada chose not to bring suit in the ICJ. Belgium brought suit.lSpain objected because only BT was injured and was not a Belgian corporation. 2009 Pearson Education, Inc publishing as Prentice Hall4-32Case 4-1Case Concerning Barcelona TractionlCour

46、t found that the injured party was the company and not its owners. Therefore, Belgium could not bring suit against Spain on behalf of the Belgian owners.lA corporation is an entity independent of its shareholders. When a shareholders interests are harmed by an act done to the company by a nation-sta

47、te, it is the company that must seek judicial remedies. Seal of the International Court of Justice 2009 Pearson Education, Inc publishing as Prentice Hall4-33The Multinational OrganizationlLarge business firms use differing organizational structures to carry on operations internationally. Parent com

48、panies take on the following forms:lThe Nonmultinational EnterpriseA domestic firm that operates internationally through independent foreign agents. The agent may act for the principal as:A sales representative to sell goods or services, orA factor to buy good or procure services for the principal.R

49、elationship governed by agency contract law. 2009 Pearson Education, Inc publishing as Prentice Hall4-34The Multinational OrganizationlThe National Multinational EnterpriseAn enterprise organized around a parent firm established in one state that operates through branches and subsidiaries in other s

50、tates.Branch a unit or a part of the parent (assembly plant, purchasing office, manufacturing plant).Subsidiary a company organized as a separate entity that is owned by the parent. 2009 Pearson Education, Inc publishing as Prentice Hall4-35The National Multinational EnterpriselThe following chart d

51、emonstrates part of the DaimlerChrysler corporate organization. DaimlerChryslerGerman ParentChryslerUnited StatesDivision of Parent FreightlinerUnited StatesTruck Mfg.SubsidiaryWestern StarCanadaTruck Mfg.SubsidiaryDetroit DieselUnited StatesHeavy Motor Mfg.Subsidiary 2009 Pearson Education, Inc pub

52、lishing as Prentice Hall4-36The InternationalMultinational Enterprise lAn enterprise made up of two or more parents from different states that co-own subordinate operating businesses in two or more states. The Royal Dutch/Shell Group is an example: 2009 Pearson Education, Inc publishing as Prentice

53、Hall4-37The Subordinate StructurelA company may create the following subordinate entities to establish a foreign presence:Representative office A contact point where interested parties can obtain information. It does not conduct business.Agent An independent person or company with authority to act o

54、n behalf of another.Branch Unit or part of a company, such as an assembly plant. It is not separately incorporated. 2009 Pearson Education, Inc publishing as Prentice Hall4-38The Subordinate StructureDisadvantages of representative offices, agents, and branches are:1.Parent has to assume all of the

55、risk of investing abroad,2.A foreign firm is often taxed at a higher rate,3.Many developing states require local participation in order for foreign firm to invest or expand its local environment. 2009 Pearson Education, Inc publishing as Prentice Hall4-39The Subordinate StructureSubsidiary Company o

56、wned by a parent or a parents holding company. Unlike a branch, it is separately incorporated.Joint venture An association of persons or companies collaborating in a business venture.Can assume any type of business form, e.g., LLC, limited partnership, or association.Can be a specific limited projec

57、t or a continuing business relationship.Holding company Company owned by a parent or parents to supervise and coordinate the operations of subsidiary companies. 2009 Pearson Education, Inc publishing as Prentice Hall4-40The InternationalMultinational Enterprise lInternational guidelines for ethical

58、behavior by multinational enterprises are mostly voluntary.lThe exception is the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The convention requires state parties to outlaw the active bribery of foreign officials. States pass their own anti-bri

59、bery criminal statutes.The US passed the Foreign Corrupt Practices Act in 1977. 2009 Pearson Education, Inc publishing as Prentice Hall4-41Home State Regulation of Multinational EnterpriseslMultinational enterprises are regulated within a state the same as a national enterprise. Important forms of n

60、ational regulation are:1.Regulation of competition2.Regulation of injuries caused by defective products3.Prohibition of sharp sales practices4.Regulation of securities5.Regulation of labor and employment6.Establishment of accounting standards7.Taxation 2009 Pearson Education, Inc publishing as Prentice Hall4-4