There is no doubt that one of the touchstones of any business expansion is understanding the targeted region at a granular level. One of the business “granularities” that cannot be overlooked are the local laws or their absence that mesh into the culture within which any business must operate. In expanding to different states, or any country, understanding these laws is essential to a successful expansion. Considering such legal contexts as a backdrop, I focus in my practice on obtaining an understanding of the specific characteristics of the targeted region, or “market” for purposes of this piece, before proceeding, which can be extremely helpful as it allows our team to come up with appropriate strategies for our clients. One example of a regional consideration that impacts business relationships and their ideals is Michigan law that recognizes the concept of common law marriage. Although the Michigan Supreme Court abolished common law marriage in 1957, a very small number of common law marriages are still recognized today. Common law marriages entered into before 1957 or before 1977 are still valid and legal in Michigan. Most of Michigan’s rules regarding is there a common law marriage in michigan can be found here. Again, while it is fair to say that the overwhelming majority of states required some sort of ceremony to effectuate a marriage, Michigan’s very specific exceptions cause some headlines, and in some instances, use of this doctrine as a “loophole” to effectuate a marriage, carte blanche, if these requirements are met: If these requirements are met, these parties are married in the State of Michigan. While these requirements are significantly relaxed in Michigan compared to other states, Michigan law does have exceptions that impact another area of SME importance: the area of commercial law. The Uniform Commercial Code has been adopted by Michigan and is followed by the courts in this state. In fact, Michigan courts consider the existing common law as well as recent developments and case law in other states when considering a particular set of fact allegations that fall within the realm of contract law. See Hurst v. Fox, 353 Mich. 419, 430, 91 N.W.2d 49 (1958).

As an example, what if two parties to a commercial transaction (e.g., two businesses) were to enter into a contract in Michigan where there was no agreement (no license, no assignment, etc.) due to the fact that the parties themselves were not married? Across state lines, or even down a city block, do these parties have an enforceable agreement? If a business wishes to engage in a commercial transaction in Michigan with an unlicensed “medical marihuana” business, for example, is this agreement enforceable? Where is the trouble? Consider the above example where the parties had an agreement, yet, similar to the case of a common law marriage, the agreement is deemed strained by the existence of a contract with an unlicensed entity which: (1) violates Michigan law and renders the contract unenforceable; or (2) is given a lower grade of legal protection due to the existence of an “illegal” contract or arrangement between the parties (where both parties sought to violate the law). While not necessarily illegal or unenforceable, the mere existence of the agreement means the transaction will face scrutiny and a high probability of negative outcomes, and likely hampered expansion in the region by self-inflicting a bad reputation.

Other examples of similar legal “loopholes” / considerations may be found in the area of intellectual property. Consider agreements that are unenforceable or unenforced in Michigan due to the existence of non-compete or non-disclosure agreements where the requisite State filings have not been made. My point here is not only to illustrate the varying legal context across the United States and encourage SMEs to study these differences in law prior to expanding to a new region, but also: To note that many of the remedies, or parts of the remedy, may just be who you hire. Consider your legal team and their familiarity with a given market or potential site for expansion or new office. People tend to think of “legal issues” as being related more directly to task-oriented tasks (like drafting documents), however, as the above examples show, to the contrary, this is an overly simplistic view of the legal function in most cases, especially for those who wish to expand to new markets.

Furthermore, the legal team can also assist in understanding and navigating local laws and their implications for expansion to new business or markets. Legal teams can also advise on ways to legally “get around” or account for the existence of certain laws to minimize the risks and negative aspects resulting from the legal context at the new location. Like all challenges and modern business dilemmas, bit by bit, the SMEs can come to understand their new market and develop an approach for success. For example: The above items do not serve to address all potential “traps” or “pitfalls” inherent within any company seeking to expand to a new region (or State or Country), but this list should start you thinking about your company’s approach, strategy and implementation of its expansion. Let me tie the above example into the broader picture of the modern world and the green transition. Expanding to new regions in a logical manner that leads to success is key to understanding your markets, building a strong reputation, and developing a loyal following of clients and customers that allows you to scale. Bring the rules to the game, so that, once play begins you can worry about improving your method of play, rather than your basic rules package.

For more information on common law marriage, you can visit Wikipedia.