1. Tom has recently inherited $600,000.00 from his late mother. He intends to use the money...

1. Tom has recently inherited $600,000.00 from his late mother. He intends to
use the money to purchase an empty warehouse in his suburb and use the
remaining money to commence an import / export from this premises. He
intends to hire at least 25 staff in the first month of commencing operations.
He has come to you for advice regarding which business structure would
best suit his planned venture and would like to know what initial and ongoing
compliance requirements with government regulators he would likely
encounter.
Please advise Tom in an email format.

Expert Solution

E-mail to Tom:

Given your area of operations I would advise you to consider ‘limited partnership’ as the business structure for your venture. As you will be in the business of import/export your operations will be exposed to various contingent liabilities. A limited partnership will put a limitation on liability with regards to both potential lawsuits as well as money. Hence you will only be liable for the amount of capital contributed by you and your personal assets will remain protected. Secondly as your business expands you will be able to attract investors easily, when compared to other forms like a sole proprietorship or general partnership.

In terms of compliance requirements you will not be required to obtain any license from U.S. Customs and Border Protection (CBP). However you will be required to get a permit or a license or a certification from other agencies. This will depend on the type of commodity that you want to import and export. The agencies from which you may have to obtain certification are U.S Department of Agriculture, U.S Department of Commerce, Environment Protection Agency, Federal Trade Commission etc.

You will also be required to obtain an export license. Examples of export license certificates are certificates provided by Department of Commerce’s Bureau of Industry and Security (dual use articles), the State Department’s Directorate of Defense Trade Controls (defense articles), the Nuclear Regulatory Commission (nuclear materials), and the U.S. Drug Enforcement Administration (controlled substances and precursor chemicals).

Please contact me in case you need any more details and I will be glad to help you.

Regards.

keosha answered 1 year ago

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