Doing
Business in the U.S. By CARRIE LOEWENTHAL MASSEY
F
Vijit Chahar,
a legal and business expert in the United States and India, outlines how start-ups can navigate American markets.
or Indian start-ups looking to do business in America, the road can be complex. “The problem is not the known knowns or the known unknowns. It is the unknown unknowns that will get you,” says Vijit Chahar, an attorney licensed in both India and New York, who also holds a doctorate degree in law and economics. Chahar’s master class, “Doing Business in the U.S.: A Legal Primer for International Entrepreneurs and Start-ups,” held virtually in April 2020 through the Nexus Start-up Hub at American Center New Delhi, sought to help Indian start-ups avoid some of the pitfalls of these “unknown unknowns.” These pitfalls can include legal penalties and civil suit damages in the United States for violations that, in India, lead to small fines, but in America, “may result in a penalty that bankrupts the entire company,” Chahar says.
Knowing the law
Courtesy Vijit Chahar
Chahar designed the master class around the key areas of U.S. law with which, he feels, Indian start-ups need to be most familiar. These include “corporate law (if registered in the U.S.), intellectual property law, importexport regulations, product liability laws, tax law and contract law (for licensing, distributor arrangements, etc.).” Some businesses may also need to know other applicable regulations like Federal Communications Commission rules applying to wireless equipment, says Chahar. But that’s not all.
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“The U.S. is very much unlike India in that state and municipal (or) local laws have far greater reach. This means that Indian start-ups need to know and comply with federal, state and local laws that impact their business. It is practically impossible for a layman to get all this right so getting proper legal advice is essential,” explains Chahar. With this breadth of legal ground in mind, Chahar aimed to cover enough in the master class to help participants figure out which questions to ask when formulating their specific U.S. strategies to avoid a mistake that leads to “an expensive education through the U.S. court system,” he says.
Negotiating contracts Knowing the fine points of contract negotiation is particularly important when working with U.S. businesses. “The most important thing for start-ups to keep in mind when negotiating commercial contracts is that some contracts are negotiable and some are not. For example, large corporations like Walmart will not negotiate the terms of their purchase agreements with small suppliers while a smaller company would be open to negotiating a custom contract for outsourcing their inventory management so that the service perfectly meets their requirements,” says Chahar. In such cases, he recommends working with legal advisors to negotiate terms of custom contracts with clients rather than using
