Alerts
Reflections of a "Foreigner" on OTC
by Gary W. Miller
May 20, 2011
Assuming that 75,000 attendees can't be all wrong, it was a good year for the 2011 Offshore Technology Conference held in Houston. Much of my focus was on our visitors from the UK and especially Aberdeen, so I was a bit of a foreigner among a close knit group of locals.
Once again, the Post Oak Hilton was sold out with participants from Scotland, and in visiting with more than just a few, I would characterize the mood among the attorneys as cautiously optimistic and the attitude among the business owners as somewhat more upbeat. Bank lawyers were more cautious and hopeful, cautious about the Scottish banks' ability and willingness to lend, but hopeful that their reorganization would allow a return to normality. Merger and Acquisition attorneys were beginning to see some action, but still longed for the days just a few years ago when middle market deals were their constant companion. Lawyers and business people alike were happy to be a year down the road from the Deepwater Horizon, and optimistic that drilling should return to reasonable levels in the Gulf.
The week started on Saturday morning with the OTC kickoff breakfast sponsored by Houston Grampian Association and the British American Business Council. Bob Ruddiman, Head of Energy with McGrigors, focused on changing times as the key note speaker and was the first attorney I have heard give the address. For the visitors, there was Texas golf at its best that followed, as well as a chance to get some quality personal time with their business associates from Aberdeen. From there, it was seminars on the new UK Anti-Bribery laws presented by Aberdeen attorneys from two firms, the always rather excellent Simmons and Paull & Williamsons cocktail parties, as well as a variety of dinners, lunches and cups of coffee. Absent this year were our friends from the Schjødt firm in Norway, but we will look for them again next year.
All in all, for an American lawyer placing himself in the middle of hundreds of overseas visitors, OTC was a good time to renew old friendships and a time to be cautiously optimistic about the times to come.
UK Companies — Choosing a Legal Entity to Operate in Texas
by Gary W. Miller
August 25, 2010
Once a UK company has decided to begin doing business in Texas, an important choice must be made as to what legal entity will be selected or created to operate in Texas. Options include:
- qualifying the UK company to do business in Texas
- forming a new corporation in one of the states in the US
- forming an entity other than a corporation in one of the states in the US
In the US, forming an entity or qualifying to do business is done on a state-by-state basis. If an entity is formed in one state and conducts business in other states, it will be necessary to qualify that entity to do business in each of the states in which it is doing business. What constitutes "doing business" is a question of law. While just making an occasional sale into a state may not constitute "doing business" for purposes of requiring qualification, having an office in the state or maintaining employees in the state will generally constitute "doing business".
Most UK companies do not simply qualify their existing UK entity to do business in the US. They do not want to subject the "mother company" to liability in the US (too many fears about litigation in our court system), and they do not want the UK company to pay taxes in the US. Some UK companies may incorporate a "single purpose" UK company and then qualify that entity to do business in the US. Most UK companies operating in the US and primarily in Texas, however, will incorporate a new corporation under the laws of Delaware (famous for its pro business attitude) or Texas. Most UK companies do not form other types of legal entities such as limited partnerships or limited liability companies, since those entities are usually formed to achieve a tax status that flow through to the parent company. UK companies generally use a corporation that pays taxes in the US, and distributes its earning to the parent through dividends.
Sometimes, the first indication to a UK company of the requirement for qualifying or incorporating in Texas is the refusal of a Texas bank to open an account until this step has been taken. Qualifying a UK company to do business in Texas or forming —a new entity in Texas is not usually an expensive or time consuming project, but does take some advance planning and cooperation between your tax experts and US attorneys.
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