Page 82 - DMGT547_INTERNATIONAL_MARKETING

Unit 4: International Legal Environment

4.3 Legal Forms of Organisations Notes

Firms doing business in United Kingdom have three primary choices for the legal form of
organisation: British Branch, Limited Company, or Partnership. India also follows an almost
similar organisation to deal with the business firms. If a limited company is the choice, more
decision is needed. A limited company may either be a public limited company (PLC), which
can raise capital by selling securities to the public or a private company, which is not allowed to
offer shares or debentures to the public. In general, a public company must meet a number of
requirements in terms of registration and capital structure, subscription for shares and profits
and assets available for distribution.
In the US, a business is able to select from among these forms: sole proprietorship, partnership
and corporation. For firms involved in international trade, the most common choice is the
corporation because of the limited liability associated with corporate form, its relatively
permanent structure and its ability to raise funds by selling securities. Most large US firms have
a corporation or Inc. nomenclature as part of their trade name.

Did u know? Every country has its own legal forms of organisations to deal with business.
The nomenclature indicating incorporation is different in other countries. For most British
Commonwealth countries, the corporate name includes limited or limited company to indicate
that the liability of the company is ‘limited’. Equivalencies in civil law countries include the
following: In France, SA (Societe Anonyme or Sociedad Anonima) for formal corporation/stock
company and Saral (Soiete a responsibiliti limitee) for an informal corporation/limited liability
company; in Germany and Switzerland, AG (Aktiengesellschaft) for a stock company and GAMBH
(Gesellschaft Mit Beschrankter Haphung) for a limited liability company. In Japan, KK
(Kabushikikaisha) for a stock company in Sweden AB and in Netherlands NV. In order to
eliminate confusion and ensure some uniformity, European countries are now encouraging the
use of PLC instead of other nomenclatures to indicate that the company is incorporated.

4.3.1 Intellectual Property

The intellectual property is the creation of human mind, the human intellect, hence the designation
"Intellectual Property". It includes copyright, patent and industrial designs. Copyright relates to
the rights of creators of literary, scientific and artistic works. Patents give exclusive rights to
inventors; however, inventions can be patented only if they are new, known as obvious, capable
of industrial applications, industrial designs are new or original aesthetic creation determining
the appearance of industrial products. These three rights are available only for limited durations.

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Caution Intellectual property also includes trade marks, service marks and appellations of
origin (geographic indications).
In case of these property rights, the aspect of intellectual creation - although existent – is less
prominent. However, protection is granted to trade mark and other signs to enable manufacturers
to distinguish their products or services from those of others. Trade marks help manufacturers
build consumer loyalty. They also assist consumers in making informed choices on the basis of
the information provided by manufacturers about the quality of the product. Description of
these property rights are as follows:
Patents: Patents provide property rights to invention. For registering an invention for a
patent, it must be new, involve an inventive step and be capable of industrial application.

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