that country, which are often required. The existence of any free trade or other agreements and treaties, including the North America Free Trade Agreement between Canada, Mexico, and the United States; the Central American Free Trade Agreement between the United States and the Central American countnes of Costa Rica, Honduras, El Salvador, Guatemala, and Nicaragua, and to which the Dominican Republic has been added; and the World Trade Organization, must be considered. Moreover, partnership structures are not as common outside of the United States, and unique corporate governance issues need to be considered. The best advice with respect to international venture capital dealings is to retain a local lawyer with experience in similar transactions.
Major Issues Companies are Dealing with Today
Perhaps the largest issue for venture capital clients is potential legislative and regulatory changes that could impose greater regulation on venture capital fund activities. Specifically, during 2005, the Secunties and Exchange Commission adopted rules to limit the venture capital fund managers' exemptions from registering as investment advisers under the Investment Advisers Act of 1940. Additionally, the venture capital fund now must comply with recent regulations about providing its investors with pnvacy notices and developing written procedures to address disclosure controls. Finally, as of the end of 2005, the venture capital industry appears to be on the front end of regulations limiting a private equity fund's exemptions from registration under the Investment Company Act of 1940. The legal landscape is continually changing.
Achieving Success: Advice to Lawyers and Clients
When dealing with clients, the first and most important guideline to lawyers is to demonstrate responsiveness. Being there when a client needs you is the most important thing you can do. Because other lawyers and law firms may have competency to provide the same services, it is important for a lawyer to demonstrate a high level of responsiveness.
When dealing with their lawyers, it is vitally important for the client to have good and clear communication. Clients need to be proactive in seeking their lawyer's advise and input. It is better to be safe than sorry.