Outsourcing in China: Five Basics for Reducing Risk

Written by Steve Dickinson

Many small and medium sized companies that engage in OEM manufacturing/outsourcing in China fail to takerepparttar steps necessary to protect themselves. When problems arise, they can do little or nothing to protect themselves because they have no legal basis for protection. The fact is that outsourcing disputes must be resolved in China, underrepparttar 119181 Chinese legal system. The Chinese legal system has improved greatly overrepparttar 119182 past ten years and taking a few basic legal steps can greatly reduce your risk. The cost of such protection is modest compared torepparttar 119183 protection it will provide.

The following five basic steps will greatly reduce your problems with Chinese manufacturers, while improving your chances of recovering should any problems arise.

1. Create and properly register your intellectual property rights inrepparttar 119184 United States. If you do not have a firm basis for your IP rights under U.S. law, you will have nothing to protect in China. Before you go to China, be sure your intellectual property is protected under U.S. law. Protect your brand identity by creating and registering your trademark, slogan and logo withrepparttar 119185 U.S. Patent and Trademark Office. Register your important copyrights withrepparttar 119186 U.S. Copyright Office. Carefully identify and protect your trade secrets, proprietary information and know how.

2. Register your trademarks in China. Registration can protect your future access torepparttar 119187 Chinese market, preventrepparttar 119188 export of counterfeit goods from China, and prevent a competitor from registering your mark in China, which would prohibit you from exporting your own product from China.

3. Use a written agreement to protect your know how and trade secrets in China. Small and medium companies usually do not have an extensive portfolio of patents. Their most valuable intangible assets typically are their know how and trade secrets, which cannot be protected by formal registration. Chinese law, however, permits companies to contractually protect their know how and trade secrets by contract. Such agreements may also address issues such as non-competition and confidentiality. Without such a written agreement, no such protection is available.

The Implication of Income Tax Charge on Estate Planning

Written by Janine Byrne

Overview ============

Inrepparttar Pre-Budget Report of December 2003repparttar 119180 Chancellor Gordon Brown announced proposals to levy an Income Tax charge from 6th April 2005 in those circumstances whererepparttar 119181 transferor of an asset retains and interest or continues to benefit from that asset. Inrepparttar 119182 instance of real property,repparttar 119183 'benefit' envisaged isrepparttar 119184 transferor continuing to reside inrepparttar 119185 property he/she has allegedly given away.

Howrepparttar 119186 Charge Applies =======================

The Government refer to such assets as 'pre-owned assets' and, broadly speaking, its intention is to taxrepparttar 119187 'annual value' of such assets as a benefit-in-kind onrepparttar 119188 former owner still enjoyingrepparttar 119189 use ofrepparttar 119190 asset. The annual value on whichrepparttar 119191 charge is based will berepparttar 119192 open-market rental for a property or a fixed percentage ofrepparttar 119193 capital value of most other assets to whichrepparttar 119194 new charge applies. Any amounts whichrepparttar 119195 transferor pays forrepparttar 119196 use ofrepparttar 119197 asset - rent for example - will be deducted fromrepparttar 119198 annual value in arriving atrepparttar 119199 taxable benefit. The charge will also apply if a person providesrepparttar 119200 funds to purchase an asset which they go on to enjoyrepparttar 119201 benefit of after 5th April 2005.

Rationale Behindrepparttar 119202 Charge ============================

The charge is intended to counter many Inheritance Tax planning schemes, but unfortunately, it will also impact many innocent and unintended victims. Thankfully,repparttar 119203 legislation has included some exceptions torepparttar 119204 application ofrepparttar 119205 charge. The charge will not apply if;

The asset was gifted before 8th March 1986

The asset is owned byrepparttar 119206 transferor's spouse

The asset is, in fact, still caught byrepparttar 119207 'Gifts with Reservation' rules and as such Inheritance Tax applies instead (hence,repparttar 119208 Income Tax charge will not be levied on top).

The asset was sold at an arm's length price for cash (even if to a connected party).

The transferor ofrepparttar 119209 asset had themselves inherited it and their ownership had ceased as a result of a Deed of Variation affecting that inheritance.

The transferor's continued enjoyment ofrepparttar 119210 asset is merely incidental or has arisen only as a result of an unforeseen change in family circumstances.

The annual taxable benefit (after deducting any contributions byrepparttar 119211 transferor, where necessary) does not exceed 2,500.

The Inland Revenue have also confirmed thatrepparttar 119212 charge will not apply in most cases where a taxpayer has funded life insurance policies held on trust. Finally, there is also an 'Opt Out' option wherebyrepparttar 119213 transferor can opt not to payrepparttar 119214 charge providedrepparttar 119215 asset is included back into their estate and therefore consequently being subject to Inheritance Tax.

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