Business Advice

[pinkcat]

Hi everyone,

Wanted to seek some of your opinions on this.

I registered an LLP and started my business on a small scale basis at Bugis Street. People who are familiar with this area would know that there are quite a number of shops selling accessories for youngsters.

I accidentally brought in 3 pairs of LV imitation earrings - which I didn't know cos the earrings was small and when you take stock - you take by the thousands honestly.

I was served a warrant by LV's lawyers and basically had to pay a fine.

I realised after that incident that quite a number of shops were also raided and this is part of LV's mission to stem out imitation.

I paid the fine after liasing with a fren who is a lawyer who advised me to pay and settle out of court instead of going through the hassle.

It's my first foray into biz and very green in this area and I didn't know who to seek for advice.

Question is - Since I have registered the biz as an LLP, could I have not paid the fine? Isn't it similar to a pte ltd in which the owner's assets and the company's assets are both separate?

The warrant was served in my name, right to the specifics of my address, without my LLP name though.

I am not trying to escape from the law. I understand that it is my mistake that I didn't see the goods properly and I paid my due fine. But I didn't intentionally bring in the goods by bulk and to make a huge profit out of it.

I am wondering whether what I did was correct or is there an alternative.

appreciate anyone's advice. Thanks

 

[may_be_divorced_soon]

Hi pinkcat,

You are right to say that a LLP is similar to a pte ltd in which the owner's assets and the co's assets are both separate as the LLP is seen as a separate legal entity. My understanding is that if the warrant is served in the name of the LLP, the liability to the partners would be limited to whatever investment amount they have contributed initially and the partners are not held liable for any shortfall.

In your case, the warrant was served in your name, not in the LLP's name. Hence, I feel that it should constitute a personal liability rather than a LLP's liability. If it is a personal liability, it makes sense to pay the fine and close the matter as you will definitly lose out if you were to go to court. My question now is: When you ordered your goods, was it done in the LLP's name or your name? If it is ordered in your name, then it makes sense for the warrant to be served in your name. And since it is a personal liability, it makes more sense to settle out of court.

 

[pinkcat]

Thanks for your comments. when you go wholesalers to get goods, these are done by cash and the receipts can be blank / made into your name or your company name. It's not usually fixed. So are you saying that if the goods are made out to my company name, I will not be liable although the warrant was served in my name? Can I dispute that then?

 

[may_be_divorced_soon]

Pinkcat,

But it is up to you to tell the wholesalers whether to issue the receipts in your name or in the co's name rite? I am afraid you didn't quite get my point. What I mean is if the goods are made out to your co's name, the warrant should be made out to your co's name and hence your liability would be limited to the investment amount you put up at the beginning. But if the goods are made out to your name, naturally the warrant will be served in your name and hence it will be a personal liability. You get my point?

I am not a lawyer. Whatever I am telling you is based on what I know about business law and based on logic. You can confirm with your friend who has advised you to settle out of court on his/her rationale for asking you to do so.

 

[skylar]

LLP is rightful in what u had said & explained as above, one thing, if ur shop in Bugis is registered as LLP, Acra will hve ur LLP registered co name but since u mentioned that LV had done a raiding and this warrant is issued out in ur name rather than ur LLP name, in 1 way, u actually can dispute that & not pay the fine.

However, thing is even if warrant is not served in ur LLP name,but the fact is that when the raid was done, and u were indeed found with 3 pairs of LV imtation earrings, then u can still be charged with a warrant for for that as made out in their trademark. They still can issue u a charge & in this case I still deem it is best for u to settle this out of court. either way u lose.

 

[may_be_divorced_soon]

Pinkcat,

I am not sure about Trademark Law. You may want to check with your lawyer friend on whether Trademark Law allows the plaintiff (in this case, LV) to sue the owners rather than the LLP/co for infringement rights though the goods are found in the LLP's premises.

Cos if LV can't claim against the owner of LLP, then anyone can incorporate a LLP or company, inject a small amount into the company as startup and start selling imitation stuff and they would be able to get away with it by hiding behind the LLP veil and merely lose the investment amount, this doesn't make sense to me.

 

[pinkcat]

oh i see..so this is trademark law that i flouted. The thing is that my lawyer fren is not well-versed in this area. She is more into conveyancing and others. So she advised me to settle out of court. I agree that people can just incorporate an LLP / company and can hide behind that but I am just wondering how I can better protect myself. I have learnt my lesson and of course stay away from "famous" stuff like hello kitty, "branded" stuff cos it is just not worth the fine.

Thanks for your inputs. Perhaps the only way out is to settle then.

 

[skylar]

pinkcat,
yes, LV, Hello Kitty, Winnie the pooh etc.. so long as a branding has a trademark which is patented, so long as if u did not bring their patentship along with ur stocks.. u can be raided..

like how Bugis was raided before for Hello Kitty stuff.. likewise it is the same..

 

[may_be_divorced_soon]

Pinkcat,

I tried asking a lawyer if the owner of a trademark can sue the LLP's owner rather than the LLP itself and if the answer is positive, under what circumstances. She kept telling me to look at the contents of the warrant served. Anyway, if I happen to see my ex boss, I will ask her to see if she knows. I am curious about this too.

 

[skylar]

Proc,
it is possible de .. coz 1 of my frd also kena before.. warrant can be issued in owner's name instead of LLP..
that is why i say either way she lose....

 

[may_be_divorced_soon]

Skylar,

Has it got anything to do with the invoice being in owner's name rather than LLP's name? Or is it simply to close the loophole of people using LLP or ltd co to escape huge liabilities?

 

[skylar]

Proc,

from what i know of ah.. it does not matters down to the invoicing at all.. so long as they find these trademarks being sold at ur shop & if u r the owner, u kena liao... so it depends on the raid, once raided & warrant issued.. mostly its under owners name or the shop.. LLP will also come into the pix soon ...

my frd was worst, her case was coz her stuff were selling like hot cakes & thus got pple sore eyes go report police then she kena raid.. for ur info she was fine up to dunno 1k or 5k per item pertaining to that trademark.. so can u imagine?

 

[may_be_divorced_soon]

Skylar,

I think it makes sense. If not there is a loophole to be exploited. $1k or $5k per item? That's alot of money assuming that she would have lotsa stock since they are selling like hot cakes. I guess the fine has to be hefy before they can really clam down on piracy.

 

[skylar]

Proc..
ya lor the amt was huge! & they even check on where her warehouse is so they can raid further there where more stocks are kept!

In the end, I knew she had to pay a HUGE sum but she got her lawyers in & she fought on the ground of ignorance of such patent trademarks.. so in the end, she still have to pay but at least not that unimaginable..

 

[pinkcat]

yah...i am in the same boat as your fren, skylar. I took in 3 pairs of earrings by mistake. I sold one to their officer before hand (in disguse as I didn't know), and they took that as an evidence, so when they came and raided my shop, they served me a warrant to pay $5k.....hmm....expensive lesson learnt..