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View Full Version : LLC partner backed out - legal advice?



JoeP
11-24-2012, 02:46 PM
Hello, I plan to contact a lawyer, but wanted to see if anyone had initial thoughts on my situation. (I'll be brief)

5 years ago a partner and I started a business. It was his idea, and I created the website and handled all of the business operations. (orders, processing, billing, etc) We had a 50% partnership; his half was to find customers and mine was to run the business. Well, about 1 year into it he decided to stop finding customers and told me that he wanted out because it wasn't worth the time. At this point, I had put in hundreds of hours on web development and operations.

So, 4 years later, I want to restart the business but with a completely different concept. Different billing concept, different target market, new name, new website... the only thing I'm concerned about is it's still based off of his idea. The LLC we formed was dissolved and I plan on being sole owner/operator of this new concept. We never trademarked or patented anything.

Any thoughts about this situation? I haven't started yet, but I am completely setup and ready to go.

Thank you for your time!
Joe P

AlexB1
01-03-2013, 12:05 PM
Did you have any sort of agreement when the LLC was dissolved about who owned what assets? The "idea" itself isn't really worth all that much, so I would be much less worried about using that than using things like original source code etc.

Evan
01-04-2013, 02:55 PM
No thoughts on it -- other than you got burned. Nothing would prohibit you from starting a new business. Venture on.

dave@businessecon.org
01-05-2013, 05:58 PM
I agree, move on. He has had his chance to patent his idea. Once the cat is out of the bag, he who catches him, owns him!

nealrm
01-05-2013, 06:08 PM
I want to restart the business but with a completely different concept. Different billing concept, different target market, new name, new website...


We never trademarked or patented anything.

While business processes can be patented, you stated that was not done and the new business uses different ... everything. There is nothing to stop you.

kcounsel
01-08-2013, 03:15 PM
JoeP, there seems to be some ambiguity with regard to the type of product idea that underlies your previously dissolved business. This idea could have manifested itself as a physical tangible good, a business process, or simply a general idea for a business venture -- it's not clear. Therefore, I cannot say whether trademark law, copyright law, patent law, or trade secrets law would be relevant here. With respect to Limited Liability Companies, these are creatures of state statutes, and so the laws on dissolution vary from state to state. It would be important to review any express or written instruments that constitute the agreement to dissolve, and determine whether allocation of intellectual property rights and the like are discussed therein.

Good luck with your new business venture, I am sure your attorney will figure it out.