Business Unfairness?

Discussion in 'Growing and Managing a Business' started by tembre89, Mar 24, 2015.

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  1. tembre89

    tembre89
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    Say a business has an exclusive license to sell equipment from a foreign manufacturer. Is it illegal or bad business practice to use that license to purchase the equipment (at cost) and use it to start a separate business. Is that unfair? Would it potentially hurt the original business relationship between the business and the manufacturer?
     
  2. atlantisrocks

    atlantisrocks
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    A few thoughts:

    Does your exclusive sales license allow or prohibit the use of their equipment in your own business?

    Was there a hidden intent to use their equipment in your own business during the negotiations for an exclusive sales license? Doing so could raise the issue of fraud.

    Would using their equipment in your own business constitute a conflict of interest such that you (as an exclusive sales agent) would be reluctant to sell that equipment to competing businesses?

    There seems to be something about this that doesn't look right.
     
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  3. tembre89

    tembre89
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    I will have to have my partner look at his license in case it actually stipulates he can't open a business with the equipment.
    The license was established a couple of decades ago so I'm pretty sure there was no intent to establish a separate business (at the time)

    I'll ask him to ask his company lawyers if a conflict of interest could arise.

    From my understanding, he wants to start the business in order to show customers a facility with the equipment installed and working.

    I'm sure it wouldn't make him reluctant to sell the equipment to other customers because the equipment can be used for a variety of products in the food business.

    Thanks for your help and guidance.
     
  4. FaaastCash

    FaaastCash
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    I don't think so, if the paper work is thoroughly done. Also if possible take help of a lawyer to make both of you aware about the financial implication or conflicts related to it.
     
  5. piapetersson

    piapetersson
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    Hi its very simple if you are not violating any of the business partnership rules and regulation then its not unfair.
     
  6. Joseph.Shivell

    Joseph.Shivell
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    This thread is now closed. If you have something new to add, PM me and I'll re-open it.
     
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