Legal Question in Business Law in New York

Business Law

I am an American citizen and I live in NY. I have a small family owned business that I own with my wife's family in South America where we sell glassware, china and other kitchen products. I also have a small internet site here in the USA where I also sell these products. I am registered with the IRS with EIN tax number and I pay taxes as a sole proprietor for all income made in the USA. I sell about 80% my products in the USA and I send 20% to South America that are sold by my wife's family in thier store.

When I contact venders here in the USA to buy my products, I never tell them about my internet business that sells here in the USA, and I only tell them about my business is in South America. The reason I do this is because some of the companies offer lower wholesale prices for overseas accounts than for stores that sell in the USA.

My question is, am I breaking any law or commiting any type of fraud by not telling these companies about my USA business in order to get cheaper wholesale prices? Also, if in the future they find out that I am also selling in the United States, can they prosecute me for anything?


Asked on 5/02/07, 10:54 am

2 Answers from Attorneys
Norman Nadel Norman Nadel, Esq.

Re: Business Law

I assume that you do not dominate any segment of the businesses in which you engage. If that is correct, you have no legal problems from your conduct. You do have and integrity problem if your domestic customers ask if you sell the same products in the United States, and you do not give an accurate answer. Your customers will be understandably angry upon discovering the truth. Customers do not like to compete with their suppliers, for obvious reasons.

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Answered on 5/02/07, 11:16 am
Johm Smith tom's

Re: Business Law

Mr. Nadel is correct. My firm's focus is on Internet and business law; so let me know if you want help coming up with a sound way to deal with this and any other issues you may have. I also speak fluent Spanish and have practiced law in Buenos Aires.

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Answered on 5/02/07, 12:04 pm


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