BBB lawyers - help re business idea?

[mackmama]

I am starting a small business with 2 friends. This business will entail us hiring someone else to do technical work for us. When we interview and hire this technical person, how should we be protecting our interests and business idea so as to prevent the alleged Facebook legal situation from occurring (where someone basically steals our idea)? Should we have the interviewee sign some sort of non-disclosure form or something that they won't share or pursue our idea on their own?

My partners and I also want to legally define our own business relationship and determine equity,etc in case this thing takes off. What type of attorney should we see to do this, or is just having a solid paper trail about our discussions enough at this point?

Thanks for any guidance! We are excited about our idea, but it's only an idea at this point so we are feeling a bit nervous/protective about it.

[HannaAddict]

You should hire a corporate lawyer who is familiar with setting up small businesses. If it is a business idea that if it grows would lend itself to later outside investors, then it is easier and cheaper to set up the entity right first rather than clean it up later. If it is a smaller idea, where you three will remain working together, there might be a different choice of entity. A paper trail of emails is not enough to protect your interests and if the business actually makes money, you need to talk about what is the best entity for tax purposes too. A good corporate attorney should be able to discuss all this with you. You also sound like there is an IP (intellectual property) component to your business An NDA can be fine for interviewing technical workers, but it really depends on your idea. But when you do hire someone it is not what you use to protect your IP rights, ideas when you hire a technical worker, you will need an agreement that anything the worker does remains your IP or it can actually be claimed by the worker (there is an entire body of law on the various rules about this). A good corporate lawyer should have some basic forms they can adjust accordingly to provide protection. You can use an NDA if talking to potential partners, etc. about your idea though. A basic start-up package (choice of entity, tax discussion, basic IP protection/assignment of rights) is about $1,500 at mid-sized firms here and goes up if your issues are more complicated. You might be able to get something done cheaper, but it does require more than boiler plate forms to do it right and even at a low paralegal rate of $100 an hour, it can take several hours to set up and provide good advice. Good luck.

[westwoodmom04]

You should hire a corporate lawyer who is familiar with setting up small businesses. If it is a business idea that if it grows would lend itself to later outside investors, then it is easier and cheaper to set up the entity right first rather than clean it up later. If it is a smaller idea, where you three will remain working together, there might be a different choice of entity. A paper trail of emails is not enough to protect your interests and if the business actually makes money, you need to talk about what is the best entity for tax purposes too. A good corporate attorney should be able to discuss all this with you. You also sound like there is an IP (intellectual property) component to your business An NDA can be fine for interviewing technical workers, but it really depends on your idea. But when you do hire someone it is not what you use to protect your IP rights, ideas when you hire a technical worker, you will need an agreement that anything the worker does remains your IP or it can actually be claimed by the worker (there is an entire body of law on the various rules about this). A good corporate lawyer should have some basic forms they can adjust accordingly to provide protection. You can use an NDA if talking to potential partners, etc. about your idea though. A basic start-up package (choice of entity, tax discussion, basic IP protection/assignment of rights) is about $1,500 at mid-sized firms here and goes up if your issues are more complicated. You might be able to get something done cheaper, but it does require more than boiler plate forms to do it right and even at a low paralegal rate of $100 an hour, it can take several hours to set up and provide good advice. Good luck.


Agree with this advice. I'm not sure about the cost, but it is important to pay enough to get competent advice. Your issues are very basic, but you need someone to explain the various options to you so you can make informed choices.

[dcmom2b3]

I think that I would consider the timing of each of these endeavors carefully: establish entity first, determine how best to protect IP, protect it, then start interviewing for tech assistance.