The guest speaker was Mr. Ricardo Lee (Solicitor, Ricardo Lee & Associates Law Office) and his company located in Science Park for 4 years. His presentation topics included “Embracing Investors”, “Organic Business Expansion”, “Managing IP Rights” and “Employment & Insurance”.
In the beginning, Mr. Lee briefed the Enterprise Risk Management definition that “The management capability to manage all business risks in pursuit of acceptable returns” (Risk Management Association (RMA) in US). Then he introduced different type of risks in the business including “Strategic”, “Operational”, “Financial”, “Compliance”, “Legal”, “Reputational”, “Environmental”, “IT” and “Political”. He mentioned that we should consider interrelated nature of risks and setting the company’s risk tolerance.
One of his first topics which I am very interested is “Due Diligence” (DD). DD would be performed during investor input or M&A. He suggested us to prepare first (before discussing terms with investor). Mr. Lee also briefed the Term Sheet and asked us to make sure a particular clause such as “Legally Binding” and concerned “Confidentiality” and “Exclusivity”.
Then Mr. Lee stated some points which could cause risk such as Shareholders Agreement, Rights/Restrictions to Existing Shareholders and Voting Rights of Minority Shareholders. The following table described the stamping time requirement and penalty if improper of share transfer.
For Organic Business Expansion, it could be considered Joint Venture (JV) but the structure of the JV should be taken care. Local Law, Intellectual Property and Regulatory Matters were also considered.
The next topic was IP Protection. He said one common problem was to display the inventions in exhibitions before patent application. On the other hand, it should be asked potential partner to sign NDA before show your invention. He also reminded us to make sure the trademark was in use to prevent potential revocation of registration.
The last topic Mr. Lee discussed was risks associated with employment. He advised us to prepare Employment Contract and Employee Handbook to protect company rights. Finally, Mr. Lee concluded that capture risks could be hidden from the minds of senior, but very real to people elsewhere in the enterprise.