Question 3 Yvette Oliver has obtained a patent for a process she has invented for the cheaper and more efficient manufacture of coatings for non-stick cooking pans. She has decided to exploit the patented process by having the goods manufactured in China and importing them to Europe. She has found a Chinese partner called Wang Bao Ren, Yvette and Bao Ren will set up a company in England to trade in the goods, to be called Easternware Limited. Yvette will transfer the patent to Easternware, and Bao Ren will set up the manufacturing in China and get the necessary government approvals and licences. Bao Ren will have a minority interest in the business in return for this contribution to the set-up. Yvette and Bao Ren have been advised that the main risk of this enterprise is potential liability for any health problems caused to users of the pans by the new process. Yvette thinks this is unlikely, and will take out liability insurance, but has decided to set up a separate subsidiary company to buy the pans from Easternware Ltd. and sell them in the UK. The profits of sale will then be paid to Easternware by way of dividends. If there are major liability problems, she hopes that Easternware Ltd. and Bao Ren and herself will be protected Advise Yvette Oliver on the following issues: a) How should she structure her investment in Easternware Limited to maximise her return and minimise her risk? b) Is her plan to protect the business from liability by creating a subsidiary to carry out the sale of the products in the UK likely to be successful