PRESENTATION TITLE

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Establishing a Presence in the United States

W. Benjamin BarkleyKilpatrick Townsend & Stockton LLPbbarkley@kilpatricktownsend.com

Atlanta, Georgia U.S.A.28 September 2011

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Kilpatrick Stockton & Townsend LLP

• Global U.S. Law Firm

• 650 Lawyers Across 18 Offices

• 10 Years in Stockholm, 37 attorneys

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Kilpatrick Townsend & Stockton LLP

Kilpatrick Townsend provides clients with unsurpassed legal representation in the following areas:

•Business & Finance: Including mergers and acquisitions, tax, real estate and capital markets •Intellectual Property: The full complement of IP procurement, counseling and litigation•Litigation: Including arbitration/disputes, insurance coverage, environmental, complex business litigation and technology•Technology Transactions: Outsourcing, licensing and joint venture agreements•Construction & Infrastructure: All aspects of transactions and litigation•Labor & Employment: Counseling, benefits and litigation

Kilpatrick Townsend & Stockton LLP

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Representative Clients

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Agenda

• US Legal System

• Establishing a US Presence– Step 1: Choice of Entity

– Step 2: Bank Accounts

– Step 3: Real Estate

– Step 4: Employees

– Step 5: Customer Agreements

– Step 6: Financing the Business

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US Legal System – Federalism

• Geographic and cultural diversity

• State and Federal Law

• 50 separate states, plus territories and local municipal laws

• Federal Preemption

– Example: Auto emission standards

– Example: Alcoholic beverage regulation

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US Legal System – Dispute Resolution

• US is a litigious society

• Historical reliance on courts to resolve disputes

• Easy access to the court system

• Legal Fees – contingency and loser pays

• Contract vs. Non-Contract disputes

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US Legal System – Key Takeaways

• Be aware of the differences

• Structure business and operations strategically

• Maintain adequate insurance

• Seek expert legal and accounting advice

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Step 1: Choice of Entity

Branch or Subsidiary?

•Branch Office

– Not a separate entity

– Simple to establish

– No protection from liability

– Risk of US taxation and audit

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Choice of Entity – Subsidiary

• Subsidiary

– Corporation, Limited Liability Company, Partnership, Other

– Liability protection (usually) for parent company and management

– Can separate parent company from US tax authorities

– Requires maintenance of separate records, accounts, operations

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Choice of Entity – Corporation

• Most common form for foreign business establishing in US – comparable to Swedish aktiebolag

• Liability Protection– Piercing the Corporate Veil

• Tax Separation

• No minimum capital requirement

• Quick, easy formation

• Dual Taxation

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Choice of Entity – Corporation

• Formation– Choose state

– Select name

– Incorporator files articles of incorporation and elects initial Board of Directors

– Board adopts bylaws, issues shares to shareholders, establishes bank accounts

– Board elects officers

– Qualify to transact business in states

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Corporation – Corporate Governance

• Shareholders– Elect Board of Directors

– Approve Articles of Incorporation

– Must approve certain fundamental actions

• Board of Directors

– Responsible for overall policy, approving major actions

– Elect officers

– Need not be US or state resident

• Officers

– Typically President, Vice President, Secretary, Treasurer

– Responsible for day-to-day management

– Apparent and delegated authority

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Choice of Entity – Limited Liability Company

• Next most common form

• Hybrid between corporation and partnership

• Liability protection

• Flexible capital structure and management

• Tax efficient, but subjects parent to US tax

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Choice of Entity – Limited Liability Company

• Formation – very similar to Corporation

– Choose state, select name

– Organizer files articles of organization and elects initial management

– Flexible rules allow great variety in structuring capital and management

– Members and Managers

– Qualify to transact business in states

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Choice of Entity – Other Forms

• Other Available Forms of Business Entity:

– Partnerships – General (GP), Limited (LP), Limited Liability (LLP)

– Joint Venture (JV)

• Uncommon for Foreign Entities

– Require 2 parties

– When to consider?• Immigration, special tax situations, regulated

businesses

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Step 2: Bank Accounts

• Local banking relationship and accounts

• Need EIN from Federal Government

• Application to Local Bank

• “Know your customer” rules

• Certified organization documents

• Board resolution

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Step 3: Real Estate

• Work with real estate agent and/or expert relocation service

• Identify suitable office space

• Negotiate lease

• Construction build-out

• Business license and permits, other licenses for regulated businesses

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Step 4: Employees

• US employment laws very different from Sweden, some ways easier, some ways more difficult

• To be covered later in the program

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Step 5: Customer Agreements

• Prepare standard business agreements suitable for use in the US

• Do not simply have translated from Swedish counterparts

• Seek advice and understand how your contract rights will differ under US law, and draft contracts to protect your interests

• Protecting your intellectual property

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Step 6: Financing the Business

• Sources of funding

• Parent financing

• Local bank or other financial institution

– Credit line, factoring line

• Outside investors

– Customer financing

– Securities laws

Questions?

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W. Benjamin BarkleyPartner

Ben Barkley advises public and private clients in a broad range of corporate finance and capital markets transactions and securities regulatory matters, including:

– mergers and acquisitions and corporate restructurings– public offerings and private placements of debt and equity securities– venture capital and private equity investments– corporate governance– joint ventures and strategic alliances– special committee, board and independent director counsel.

Mr. Barkley has broad experience structuring and executing mergers and acquisitions and other control transactions, including extensive experience representing strategic buyers in consolidating industries, leading serial acquisition programs including from 10 to 120 acquisitions. He has handled public and private issuances of debt securities in transactions ranging in size from $20 million to $1.35 billion, including Rule 144A offerings, high yield 144A-for-life bond offerings, investment grade public debt offerings, institutional private placements, and Exxon Capital debt exchange offerings. He also has extensive experience with equity offerings ranging in size from $10 million to more than $1 billion, including initial public offerings, secondary offerings, at-the-market continuous offerings, and PIPES transactions.

Mr. Barkley has been listed in the 2011 edition of The Best Lawyers in America® for Corporate, Mergers & Acquisitions, and Securities law, in the 2009, 2010 and 2011 editions of Chambers USA: America's Leading Lawyers for Business as a leading lawyer for Corporate/Mergers & Acquisitions, and in the 2009 and 2011 editions of Legal 500 US for Mergers & Acquisitions. He previously served as Deputy Managing Partner of the firm, and as Chairman of the Corporate Department. He is AV® rated by Martindale-Hubbell.

Contact Information:+1 404.815.6569

Fax: +1 404.541.3121Bbarkley@KilpatrickTownsend.com

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