MANAGING RISKS is a part of doing business. Companies utilizing the IP HOLDING subsidiary structure need to KNOW HOW to manage two main risks….

MANAGING RISKS is a part of doing business. Companies utilizing the IP HOLDING subsidiary structure need to KNOW HOW to manage two main risks: 1. losing TRADEMARK PROTECTION, 2. being challenged by TAX AUTHORITIES. Trademark law requires that the trademark owner exercise control of the quality of the goods or services for which the trademark is licensed, otherwise the mark may be deemed abandoned. The trademark owner should evidence performance of the control requirement to address this compliance risk. From a TAX RISK perspective, the IP holding company should not be incorporated solely for the transferring company to avail itself of the tax benefit of reducing its tax base. The company must be able to justify substantial business reasons distinct from the tax benefits as well as operational activities of the IP holding company. 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s