Corporate Counsel All The Way Through Startup Acquisition

Applicant: Mr. Zhao
Nationality: Chinese
Applying For: Corporate Counsel
Challenges:

• Client was an executive from China who did not know U.S. Business rules or culture
• Customs issues from import and export
• Dealing with the FDA, competitors, and trademark issues
• Very detailed and careful client, always extremely stressed
• Huge merger and acquisition
• U.S company needed to separate from the Chinese company, which can be a difficult and time-consuming problem

BACKGROUND

Sometimes, when people think of business executives like our corporate counsel client, Mr. Zhao, they believe that because of their business experience they will be able to have all the answers, they will be able to operate fairly independently. The reality of the situation is an executive, even one from a central part of a business, may not know everything they need to know to start up a new business from scratch. As strange as it may seem, being a business executive is a different skill set and knowledge base than being a start-up business owner. Throw in the fact that Mr. Zhao was coming to a completely different country to try to begin a business, and you can begin to understand why he needed help.

Our relationship with Mr. Zhao began fairly traditionally for us; he was an executive who came to us needing an immigration visa to come to the United States in order to set up a U.S.-based branch of an already successful Chinese vitamin and supplement company. We got him an L-1 and EB-1C and he came to the U.S. and began to build the company that he was sent here to build. However, because we were so thorough and so knowledgeable about not only the process of getting the visa but also about business practices, Mr. Zhao wanted to hire us on as corporate counsel to guide him through the various potential pitfalls of starting a new business. We agreed to the partnership and got to work.

KEYS TO SUCCESS

Over the years, we have interacted with thousands of businesses in order to help their employees come to the United States or to help them establish themselves in the United States. Because part of that is studying business law and business infrastructure, we have built up a very solid foundation from which to coach corporate counsel clients. The key is to make sure that our clients feel like we are partners in their success, not just contractors who come in just to fix things that get broken.

“Corporate counsel from Tsang & Associates isn’t just about having someone on hand to fix issues as they pop up, although that is a very useful part of their toolbox. It is also about coaching, evaluating, and planning. I was able to utilize their experience in order to breach a cultural divide that threatened my company, to set up the company properly and strongly from the beginning, and to navigate every aspect of a massive, complicated buy-out. They are partners in my ventures and have helped me in nearly every aspect of my business and throughout many aspects of my life outside of my business.” – Mr. Zhao

Mr. Zhao understood that quickly and used our services to help him start up his business. While infrastructure and funding weren’t the huge issues that they normally are for start-ups thanks to the Chinese business, there were other unique problems Mr. Zhao came across. Much like American Factory the television show, Mr. Zhao was an executive from China who had very specific and strict ideas of what his corporate culture would be like and how his employees would behave. These ideas did not fly well with his U.S. Employees and executives and he quickly found himself with several severe employee disputes. We were able to help him navigate the cultural divide and to resolve those disputes in a manner that was fair to his employees.

After that came many issues that often pop up when dealing with supplementation and vitamin companies, namely import issues and issues with the Food and Drug Administration. Receiving correspondence from the F.D.A. can feel extremely threatening, especially to a man who was still adapting to U.S. culture. Thus, Mr. Zhao was in somewhat of a panic when he called our office in regards to these issues. We were able to assure him that his company would be safe and that these issues could be resolved. Part of what we do is handle the legal situations when they arise, but a major key to what we do is to empower our clients. So many people are willing to quit when they hit a roadblock, but we know that empowerment and confidence can give our clients all the extra juice they need to overcome almost any obstacle.

Eventually, the U.S. company became so large that it made more sense to Mr. Zhao and the U.S. company to separate from the Chinese company from which it originally spawned. In order to separate properly, a very tricky buy-out of the China-based shareholders would need to occur. This would involve figuring out back pay, inventory, taxes, and of course buy-out figures for the Chinese executives. However, what could have taken an extremely long time to sort out from a legal perspective turned out to be an acutely limited time frame thanks to our relationship with Mr. Zhao. Because we were advising Mr. Zhao the whole way, he had all the proper documentation to figure out who owed what and where all the inventory was and who technically owned it. Because he received our coaching, he had all the legal documentation needed to make a tricky buy-out much faster than it would have been if he had needed to hire representation that did not know his business well.

OUTCOME

The buy-out process went smoothly and quickly. Mr. Zhao’s business continued to grow and grow. Eventually, it became so big that Mr. Zhao felt comfortable getting his green card and becoming a U.S. citizen. Now his company sells supplements to some of the biggest chain stores in the United States. Mr. Zhao was beyond grateful that Tsang & Associates helped him achieve his American Dream.

*Name has been changed for client privacy.