You Asked, And He Answered!
Attorney Vijit Chahar sends his replies to pending questions left at the end of last week’s ‘Doing Business in the U.S.’ webinar.
Q. 1: What is the legal condition of the PayPal bank account and the Payoneer account?
A: I will address PayPal since I am not familiar with Payoneer. Legally speaking, PayPal is not a bank. Business and consumer accounts in US banks are insured up to $250,000 by the Federal Government. PayPal accounts are not. This means that if a bank goes bankrupt, depositors will be compensated up to $250,000 while PayPal accounts will not. More practically, you cannot deposit checks in a PayPal account and serious business transactions happen over regular banking channels. I think you should have a bank account into which money received through PayPal should be deposited so you can use PayPal for small transactions and your bank account for regular business transactions. As far as Indian law is concerned, foreign exchange transactions have to be conducted over regular banking channels through an Authorized Dealer Bank so PayPal will not be suitable for most types of foreign transactions and can cause problems in the long run.
Q. 2: How does the IPR protect company interests?
A: As I mentioned in my talk, IPR gives defensive and offensive rights. By defensive rights, I mean it protects you from claims that you have infringed the IP of a third party. The burden of proof shifts to them to show that your patent or copyright was wrongfully granted rather than you being responsible for proving that you did not violate their IP. Offensively, registered IP helps you to prohibit any third party from selling goods and services that violate your IP. By having registered IP, it is easier for you to prove that you indeed have the IPR that you claim you have, you can get statutory damages (i.e. you can be awarded substantial money without having to show how the infringement caused losses to you and how much loss you incurred), you can be awarded the costs you incurred in the case you brought to prevent the third party from infringing your IP and lastly, you can register your IP with the US Customs and Border Protection which will automatically try and prevent any goods that violate your IP from being imported into the U.S.
Q. 3: How much variation is expected in federal vs state laws for new businesses?
A: You have to comply with both federal and state laws. This means complying with the stricter of the two and when they require different things, you must comply with both. By and large, federal and state law do not conflict and it is possible to do so with good legal counsel. Since new businesses, based on the nature of the business, have to comply with different areas of law, it is not possible to answer in greater detail. If you are asking whether the variation in state and federal laws is small enough that you can restrict yourself to dealing with one or the other, the answer is definitely no.