The Ministry of Trade and Commerce of the Global Country of World Peace may offer help to start up and established companies that offer life supporting, socially responsible, environmental friendly products or services, and are willing to support the programs of The Global Country of World Peace by granting The Global Country of World Peace a percentage of the companies profit, or revenue, or guaranteed dividend, or an ownership stake in the company.
This section outlines the service provided by the Ministry of Trade and Commerce of the Global Country of World Peace in relation to development of start-up or established businesses, which may or may not include an investment by a third party in the business.
Selection Criteria and Process Flow for
Business Development Service:
This figure presents the relationship between the Global Country of World Peace and the Ministry of Trade and Commerce, and shows the basic process flow for the Ministry of Trade and Commerce related to its business development service for start-up and established companies.
This page outline the service provided by the Ministry of Trade and Commerce of the Global Country of World Peace in relation to development of start-up or established businesses, which may or may not include an investment by a third party in the business.
The following five sections document the basic service and fees for service provided by the Ministry of Trade and Commerce in this context, however, these may vary from company-to-company, and are intended for indicative purposes only. The Ministry of Trade and Commerce reserves the right to change its services and fees, and does not warrant that the following information is complete or accurate, and may contain omissions.
1. Preliminary Screening (Filter #1)
The purpose of the preliminary screening process is to provide a basic filter of companies which may or may not meet the more detailed criteria of the Ministry of Trade and Commerce. The preliminary screening process is the first step taken by a start-up (or established) company to gain the administrative, financial and operational support of the Ministry of Trade and Commerce. >MORE
There are six basic criteria the Ministry of Trade and Commerce is looking for in a start-up company, in order of importance:
A) A large, rapidly expanding market;
B) A management team composed of people who have the experience, qualification and track record of success to can get the job done;
C) A brilliant idea of technology or of unique vision that can be commercialized;
D) A strategy that has a strong and sustainable competitive advantage, and is socially- and ethically-responsible;
E) A business with potential and the desire to support the mission and goals of the Global Country of World Peace, including the Poverty Removal Program; and
F) A reasonable anticipated price per share, and other financial data.
Each of these six criteria are rated on a scale of “0” for no evidence, “1” for some evidence, and “2” for a significant amount of evidence that criterion has or will be met, with a perfect rating being 12/12. Other criteria may be applied by the Ministry of Trade and Commerce for established companies, at its discretion
For a start-up company to pass this preliminary screening process and be assessed as meeting the basic criteria of the Ministry of Trade and Commerce for further administrative, financial and operational support, it must score at least “1” on each of the above six criteria for a total of 6/12.
If, for example, a company scores 2/2 for criterion A) but 0/2 for criterion E) and 1/1 for all other criteria, to gain a total rating of 6/12, it would not pass this preliminary screening and thus would not meet the basic criteria established by the Ministry of Trade and Commerce for continued administrative, financial or operational support, however other forms of support may be forthcoming from the Ministry.
There is no fee to the start-up company for the Ministry of Trade and Commerce to perform preliminary screening.
2. Business Evaluation (Filter #2)
If a company meets the criteria for preliminary screening, it would be eligible for business evaluation. The purpose of business evaluation is to more thoroughly assess the merits of the company. The criteria for the evaluation of a business is based on a number of factors, which may vary from business-to-business. These criteria are weighted and rated by the Ministry of Trade and Commerce against core measures and standards, and if the company meets these criteria, a recommendation for the company to move to the next level of assessment will be made. > MORE
The business evaluation criteria used by the Ministry of Trade and Commerce can be grouped under the six basic categories listed in A. Preliminary Screening, include but are not limited to the following:
i. Sales potential of the product or service;
ii. Growth potential of the market;
iii. Market trends;
iv. History of the market;
v. Projections for the market;
vi. Quality of product or service;
vii. Nature and size of the niche market;
viii. Informal competitive protection of the product or service (i.e., know-how);
ix. Nature of competition in the industry;
x. Overall competitive protection of the product or service;
xi. The venture will stimulate an existing market or the venture will create a new market;
xii. Formal competitive protection of the product or service (e.g., trademarks and patents).
2) People and Management
i. Enthusiasm of the entrepreneur(s);
ii. Trustworthiness of the entrepreneur(s);
iii. Expertise of the entrepreneur(s);
iv. Track record of the entrepreneur(s) relevant to the venture;
v. Personality of the entrepreneur(s);
vi. Capability of the entrepreneur(s) for sustained intense effort;
vii. Ability of the entrepreneur(s) to evaluate and react well to risk;
viii. Entrepreneur(s) are articulate in discussing venture;
ix. Entrepreneur(s) attends to details;
x. Entrepreneur(s) is thoroughly familiar with the market targeted by the venture;
xi. Entrepreneur(s) has demonstrated leadership in the past;
xii. Entrepreneur(s) are affiliated with the Global Country of World Peace;
xiii. Entrepreneur(s) was recommended to the Ministry of Trade and Commerce from a reputable source;
xiv. The Ministry of Trade and Commerce is familiar with the entrepreneur’s reputation;
xv. Entrepreneur(s) have a personality which is compatible with the personality of the potential investor(s); and
xvi. Ministry of Trade and Commerce personnel like the entrepreneur(s) upon meeting.
3) Business Concept and Model
i. The product is proprietary or can otherwise be protected;
ii. The product enjoys demonstrable market success;
iii. The product has been developed to the point of a functioning prototype;
iv. The product may be described as “high tech”;
v. The business model is one which the investor(s) is familiar with;
vi. There is little threat of competition;
vii. The venture will/does have a competitive advantage;
viii. The product will/does have a competitive advantage;
ix. The marketing plan;
x. The sales plan;
xi. The product development plan;
xii. The strategic plan;
xiii. The human resources plan;
xiv. Demand for the product or service;
xv. How the venture will make money;
xvi. The venture relies on the participation of one person; and
xvii. Clarity of business model
i. The business can be sustained;
ii. The business and management are socially-responsible;
iii. The business and management are ethical;
iv. The business supports human health and social progress;
v. The business does not adversely threaten to harm the environment or society in which it operates;
vi. The business is operated safely and demonstrably cares for it employees; and
vii. The business has developed and implemented health, safety and environmental policies and procedures.
5) Potential to support the Global Country of World Peace
i. The company can/does support the goals and mission of the Global Country of World Peace;
ii. The company can/does support the goals and mission of the Poverty Removal Program;
iii. Potential scale of support for the goals and mission of the Global Country of World Peace; and
iv. Supporting the goals and mission of the Global Country of World Peace is a stated aim of the company.
6) Financials and Investment
i. Low overheads;
ii. Ability to break even without the need for further funding;
iii. Low initial capital expenditure needed;
iv. Size of investment;
v. Cost to test market;
vi. Perceived financial rewards;
vii. Expected rate of return;
viii. High gross and net profit margins;
ix. Well-developed, believable and defensible pro forma financial projections;
x. Audited financials; auditor has been appointed;
xi. Venture has sought, received and listens to legal advice
xii. Potential routes to exit;
xiii. Investor’s understanding of the business or industry;
xiv. Possibility for investor involvement in business development;
xv. Potential for investor’s strengths filling gaps in the business;
xvi. Is the venture local to the potential investor(s); and
xvii. Presence of potential co-investor(s).
The outcome of the business evaluation results in a recommendation that no further action be taken or that the company be recommended for further evaluation, documentation and possible investment. Generally there is no fee to the company for the Ministry of Trade and Commerce to perform this business evaluation. However, on a case-by-case basis, particularly if further work on the business plan is required at this stage of development, the business planning service may be performed or facilitated by the Ministry of Trade and Commerce, for which a fee would be paid by the company.
Depending on the type of business and other criteria determined by the Ministry, at this stage in the development service the Ministry of Trade and Commerce may no longer the facilitator of development between company and potential investor, and the following functions may or may not be performed by the Ministry.
3. Due Diligence (Filter #3)
The due diligence process will involve a detailed analysis of the company. This process may be performed by the Ministry of Trade and Commerce in conjunction with a reputable accounting and/or legal services firm, or it may be performed by the potential investor and the Ministry of Trade and Commerce, or may be performed independently of the Ministry of Trade and Commerce by a third party. > MORE
Some of the matters which could become the subject of a due diligence analysis of the company include the following:
A. Corporate Structure and Ownership
A.1 Legal organisation structure, including branch offices;
A.2 Articles of incorporation and by-laws of the company;
A.3 Extract from trade register;
A.4 Names of shareholders, directors and officers the company and, where applicable, partners and trustees;
A.5 Shareholders’ agreements, including voting, pooling, transfer or put or call agreements;
A.6 Authorised and issued share capital and partnership interests of the company including shareholders’ register, share transfer register and share certificate books;
A.7 List of (a) the start-up company's subsidiaries, including percentage of ownership and any other shareholders, (b) any other entities in which the company holds, or has the right to acquire, more than a 5% equity interest;
A.8 Agreements involving issuance of securities, to which the company is a party, including warrant and option agreements; schedule of all outstanding stock options, if any, or other rights to acquire securities of the company;
A.9 Partnership, joint venture, merger, demerger agreements;
A.10 Minutes of Board of Directors’ and Shareholders’ meetings for two years prior;
A.11 Jurisdictions in which the start-up company is registered to carry on business; and
A.12 Registrations or licences to carry on business in each relevant jurisdiction.
B. Employees and Employee Plans
B.1 Organisation chart with headcount by division/department with senior job titles;
B.2 List of key employees, including (a) date of hire; (b) position currently held, (c) monthly salary or wages;
B.3 Description of compensation policies;
B.4 Salary range table by annual compensation;
B.5 Three-year employee turnover analysis (key employees only);
B.6 Human resources handbooks and/or employee manuals; including information and documentation regarding personnel policies, procedures and practices, safety programs and procedures and fringe benefits;
B.7 Management contracts, employment, consulting or similar agreements;
B.8 Restrictive covenants such as non‑competition, non-solicitation and confidentiality agreements executed by employees or contractors of the start-up company;
B.9 Employee agreements reference profit-sharing, bonus, deferred compensation, stock option, stock purchase, severance payments, sales commission and incentive plans, loans or extensions of credit or other similar employee agreements;
B.10 Employee benefit plans, including health and dental, retirement, pension, life insurance, disability coverage, workers’ compensation or other employee benefit plans;
B.11 In respect of B.9 and B.10 copies of contracts, contract amendments, plans, funding documents, actuarial reports, financial statements for the last 2 years, annual returns, employer communications, income tax rulings, cost estimates and liability reports, claims, suits or other proceedings, surpluses, contribution holidays, amendments, assignability and change of control, sponsorship and funded status of each employee agreement or plan;
B.12 Collective bargaining or other labour agreements;
B.13 Outstanding/anticipated claims, proceedings, prosecutions or obligations regarding employment or labour disputes; including wrongful dismissal, employment standards, labour relations, occupational health and safety, human rights, pay and employment equity, workers’ compensation or any other employment-related matters; and
B.14 Documentation of compliance with labour laws and welfare regulations.
C. Business Information
C.1 Top ten customers (if applicable), by revenue to the company, including percentage of total sales accounted for by these customers;
C.2 Top ten suppliers to the company (if applicable), including percentage of total expenses accounted for by these suppliers;
C.3 Major client fee and/or pricing structures (timing, components, contingencies);
C.4 Strategic business plans, budgets for past two years;
C.5 Significant future actions proposed or planned, including any proposed new product lines, additions or expansions to existing premises, new premises, acquisitions, programs of diversification and programs of rationalisation/restructuring;
C.6 Any operating performance records used by the company to monitor monthly or other periodic performance;
C.7 Marketing plans for the last two years, description of sales and marketing strategy, sales structure and responsibilities;
C.8 Market growth analysis for each operation by region, including cost/pricing outlook;
C.9 Details of competitors for each operation by region and market share information;
C.10 Analysis of customers by volume and value;
C.11 Analysis of suppliers by volume and value;
C.12 Internal audit reports and responses;
C.13 List of accreditations, notifications, certifications related to the company.
D. Material Agreements
D.1 Material contracts and agreements of the company including those with respect to: Acquisitions (past five years), joint venture, co‑ownership, partnership, consulting, confidentiality and non-competition (third party), distribution and agency, research and development agreements to which the company is a party;
D.2 Agreements which cannot be terminated with less than six months’ notice or with an aggregate consideration in excess of US$20,000;
D.3 Contracts with customers and suppliers (ten most significant, each);
D.4 Agreements with independent contractors (five most significant);
D.5 Samples of general terms and conditions, service contracts, purchase orders, licence agreements or other standard form agreements;
D.6 Agreements, contracts or commitments relating to capital expenditures or acquisition of capital assets;
D.7 Insurance policies in place for past two years. Include scope of coverage, amount of coverage, premiums paid, expiry dates, insurer’s certificates and claims history during such period;
D.8 Agreements and other documents relating to the acquisition of the shares or assets of any other person or business entity;
D.9 Any debt arrangements, guarantees or indemnification between officers, directors or the shareholder and the company;
D.10 Default notices under any agreement; and
D.11 Any agreement requiring the consent of a third party to the proposed transaction or which may be terminated as a result of the transaction.
E. Related Party Transactions
E.1 Details of any indebtedness of directors, officers, shareholders (and, where applicable, partners) and their respective associates and affiliates to the company;
E.2 Agreements between the company and related parties, including intercompany agreements; and
E.3 Shareholder loan related documentation.
F. Intellectual Property
F.1 License agreements to which the company is a party, either as licensor or licensee, with respect to the use of intellectual property, including franchise agreements and royalty agreements;
F.2 Patents and copyright, trademark, service mark or domain name registrations owned by the company;
F.3 List of trade names, logos, corporate names, brand names, used in the company’s business (and which would remain post transaction);
F.4 List of proprietary software or technology used in the company’s business;
F.5 Confidentiality or other agreements with employees respecting intellectual property;
F.6 Description of other intellectual property rights held by the company, including, but not limited to, trade secrets, formulae, inventions and technical information; and
F.7 Details of any alleged infringement of any patent, trademark or other intellectual property right.
G.1 Licenses, permits, orders, approvals and authorisations of governmental and regulatory bodies related to the company;
G.2 Notices, orders or communications to the company from governmental agencies or other regulatory bodies relating to any alleged or actual non-compliance with any regulatory requirements, and responses;
G.3 Description of any regulatory investigations or sanctions during past two years;
G.4 Existing, pending or threatened litigation affecting company, including civil and criminal investigations, asserted claims or matters in arbitration, and providing: nature and status of the litigation; amount or maximum total liability or recovery involved; insurance coverage information, if liability is covered; copies of pleadings and other material documents;
G.5 Letters to auditors from counsel regarding material pending or threatened claims or assessments for the past three years;
G.6 Environmental permits, licences, orders, authorisations, notifications or approvals related to the company;
G.7 Environmental assessments, studies or audits conducted or commissioned by or in possession of the company; and
G.8 List of persons holding powers of attorney related to business of the company and describe terms and scope of any powers of attorney.
H. Real Estate
H.1 Property owned by the company, providing details of: location and description, date of acquisition, deeds, title policies and attorneys’ opinions, insurance policies, zoning or use restrictions and all mortgages and other liens or encumbrances;
H.2 Summary of outstanding leased properties, including: address, square footage, payment, expiration, renewal options, exceptions;
H.3 Lease files, including leasehold insurance policies and any financing arrangements; and
H.4 List of leasehold improvements showing total costs by major items and depreciation schedule.
I. Fixed Assets and Information Technology Systems
I.1 List of machinery, equipment, computer hardware and software, telecommunication equipment, furniture, fixtures, trucks and automobiles of the company, including: original capital cost, undepreciated capital cost, age and location;
I.2 Description of technology systems and software used in the businesses;
I.3 List of technology vendors;
I.4 Hardware purchase, lease and maintenance agreements, software maintenance agreements;
I.5 Major systems initiatives; and
I.6 Disaster recovery program.
J.1 Accounting procedures for income and expense recognition, depreciation methods, deferred assets and liabilities, cash flow treatment, amortisation, intercompany charges and allocations, etc.;
J.2 Annual audited financial statements of the company for last three years (Balance Sheet, Income Statement and Statement of Cash Flows), if applicable;
J.3 Balance Sheet and Income Statement details;
J.4 Reconciliation between audited financial statements and International Accounting Standards (“IAS”);
J.5 Monthly financial statements for Year To Date (internal management reports);
J.6 Projected income statements and Balance Sheets for next three years;
J.7 Explanation of adjustments to profits before tax, exceptional profits or losses, extraordinary items;
J.8 Documents relating to material write-downs or write-offs other than in the ordinary course
J.9 Planned capital expenditures;
J.10 Ageing schedules for accounts receivable for past two years (if applicable);
J.11 Details of any off balance sheet items and liabilities not reflected in financial statements;
J.12 Details of short and long term debt including original and current amounts outstanding, due dates and interest rates;
J.13 Loan, financing, financial or performance guarantee, credit, liens and other agreements relating to the company debt;
J.14 Mortgages, charges, security agreements and pledges relating to the assets of the start-up company; and
J.15 Details of banks or other lenders with whom the company has a financial relationship, including list of the company bank accounts and names of authorised signatories
K.1 Income tax returns for previous three years (all by tax jurisdiction);
K.2 Tax authorities’ examination and response, audit reports, assessments for previous three years;
K.3 Tax accrual work papers, including provision calculation, tax reserves, ‘cushion’ analysis and tax account reconciliations (including Federal and State, current and deferred accounts) for the last two tax years filed;
K.4 Details regarding deferred taxes, unused loss and credit carryovers, including foreign tax credits and/or deferred intercompany transactions;
K.5 Tax returns for all remaining open audit years (if more than K.1);
K.6 Pending tax assessments;
K.7 Tax sharing agreements;
K.8 Registration certificates from income tax, VAT or similar, and any other applicable tax registers;
K.9 Federal, state, provincial, local or foreign tax authority information, including: standard forms, memoranda, reports, rulings, closing agreements, tax cases, protests, claims for refund, notices of deficiency and other documents relating to any administrative proceeding or tax litigation involving the company;
K.10 Description of significant transactions involving the company outside the ordinary course of business that occurred in all open tax years (i.e., restructuring, acquisitions or dispositions) and the reported tax treatment thereof (including any allocation of purchase price);
K.11 Details of intra-group tax pooling and/or consolidation for all direct and indirect taxes
K.12 Tax indemnities given/received by the company in connection with a sale/purchase of shares or assets that remain in effect;
K.13 Details regarding property, sales, excise, transfer, value added, goods and services or employment taxes relating to the company; and
K.14 Description of tax accounting methods of the company that have been changed, modified or adopted during the five previous taxable years.
Due diligence may result in a “recommendation to invest” in the company or a “recommendation to proceed no further” in assessing the business opportunity. However, the Ministry of Trade and Commerce does not make recommendations to investors; recommendations of whether to invest or not are made either by the company or by independent third parties. A number of different recommendations to the company may also be made at this time by the Ministry of Trade and Commerce, including a recommendation to reconsider the business model, conduct further research on the market and product, develop the product or service further, operate the company for a certain period of time before further assessment by the Ministry of Trade and Commerce, etc.
The due diligence process may be performed by the potential investor (or their representatives), on behalf of the investor(s) by the Ministry of Trade and Commerce (possibly in conjunction with an accounting or legal services firm), or may be performed by an independent third party. Should due diligence be carried out by an independent third party, no responsibility for the findings or recommendations made by a third party will be incurred by the Ministry of Trade and Commerce.
Depending on the nature of the transaction being contemplated by the company, there may be no direct cost to the company for the Ministry of Trade and Commerce to perform the due diligence. However, there may be a fee charged by the Ministry of Trade and Commerce to the investor(s), and some of this cost may be borne by the company. In either case, should the Ministry of Trade and Commerce perform this service, a fee will be charged based on the scope and objectives of the due diligence process.
4. Documentation and Company Development
If a company is recommended to produce further documentation of its business, such documentation may consist of anything from a slide presentation (with or without pro forma financial projections), through to a complete business plan or an Information Memorandum (“IM”). > MORE
Depending on the nature of, and legal requirements for, further documentation, including but not limited to a business plan and an IM, the Ministry of Trade and Commerce can either assist the company to produce such documentation or will help facilitate the production of such documentation as is relevant to the parameters of the proposed business transaction.
Activities performed by the Ministry of Trade and Commerce during this phase of company development may include the following:
i. Analyzing transaction options available to the company;
ii. Counselling the company as to strategy and tactics for effecting a potential transaction, including addressing any international, geopolitical issues which may be faced in a cross-border transaction;
iii. Advising the company as to the structure and form of a possible transaction, including the form of any agreements related thereto;
iv. Assisting the company in obtaining appropriate information and in preparing documentation related to a potential transaction;
v. Introducing the company to institutional investors, accredited individual investors, strategic or financial buyers, distributors, licensees, and/or strategic partners, as may be appropriate, as well as providing additional business development opportunities;
vi. Assisting in negotiations related to a potential transaction, as may be appropriate, on behalf of the company; and
vii. Rendering such other financial advisory and investment banking services as may from time to time be agreed upon by the company and the Ministry of Trade and Commerce.
A fee for service will be charged in either of these cases. Documentation may also be completed by an independent third party.
If it has not already done so, the Ministry of Trade and Commerce will introduce the company to a potential investor or investors who have been pre-qualified as having an interest in the type of business under consideration. Depending on the type of transaction, the scope of transaction, the terms of the transaction, etc. assuming that an investment is made in the company by an investor(s), the Ministry of Trade and Commerce will be paid a fee on a commission basis. > MORE
The possible types of transaction between the company and an investor which may occur as a result of assessments made by the Ministry of Trade and Commerce include:
i. A private placement, conducted pursuant to applicable U.S. or foreign securities laws, rules and regulations with an investor(s) including, a placement of equity, debt, convertible securities or other financial instrument in such amount as the company and the Ministry of Trade and Commerce may agree upon;
ii. A strategic alliance that involves an agreement with an investor(s) that may, either directly or indirectly, enter into any type of sales, marketing and/or management agreement with the company;
iii. The sale of the company, whether by merger, reverse merger, stock sale or sale in one or more transactions, of all or substantially all of the assets of the start-up company to an investor(s) or where the shareholders of the company own less than a majority of the surviving entity or, in the case of a merger or sale with or to a shell company or a special purpose acquisition corporation, irrespective of the resulting division of ownership;
iv. The sale of a portion of the company, whether by merger, stock sale or sale in one or more transactions, of a portion of the assets of the company to an investor(s);
v. A recapitalization involving the issuance of any indebtedness or equity securities by the company to an investor(s) which may or may not involve, among other items, an extraordinary dividend being paid or equity securities being repurchased by the company, whether as a stand-alone transaction or in connection with a related transaction; or
vi. A strategic acquisition pursuant to which (i) the company consummates a merger, consolidation or other business combination with an investor(s), where the company is the surviving entity (or its shareholders own a majority of the equity in the surviving entity) in such business combination, or (ii) the company acquires a majority of the total equity ownership of an investor(s), or all or substantially all of the assets of an investor(s).
Fees for these services will be provided on a case-by-case basis, but typically such transactions would attract both a service fee as well as a commission on consummation of a transaction.
6. Operating Business
After an investment in the company by an investor(s), representatives of the Ministry of Trade and Commerce may be involved in the on-going business of the company, including as a representative of the investor(s), or as a representative of the Global Country of World Peace. Any potential conflicts of interest will be disclosed to all parties and resolved if of concern.
This document is sole property of the Ministry of Trade and Commerce of the Global Country of World Peace, and may not be transferred, duplicated or distributed in any form without the express written consent of the Ministry of Trade and Commerce of the Global Country of World Peace. All intellectual property rights related to copyright, common or registered trademarks, service marks, and other property of the Ministry of Trade and Commerce are to be used for the sole benefit of the Ministry of Trade and Commerce of the Global Country of World Peace.