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If a business is someone else idea can you start it without them? It has already been done by others its just new to our area.
Anonymous3 views5 answers
As a franchise attorney, I basically agree with what the other attorney says, but more information is needed. Were you paid for your research, business plan, etc? And if so, how - as an employee or an independent contractor. These factors, in addition to the presence (or absence) of a nondisclosure - noncompete agreement, will influence the ultimate outcome. Ownership of the work, if you were paid for it, is questionable. If others are already doing this, it's difficult for your client to say his idea is proprietary. But you should sit down with a good intellectual property attorney in your area to review all documents and circumstances.
Kevin B. Murphy, B.S., M.B.A., J.D.
Attorney at Law
Director of Operations - Mr. Franchise
FRANCHISE FOUNDATIONS APC
The general answer is yes, you can go on without your partners, but depends. Depends on the agreements, both written and oral, between the parties. Oral agreements are tricky because the actions of the parties limit the understanding of the agreement. The business plan you prepared could be evidence of the understanding between the parties. You should check with a corporate lawyer about this issue.
Ideas are a dime a million, so anybody can take an idea and start a business. Issues like trademarks and corporate identity are a bit more complicated, but since there is not business yet, then only a filing for Intend to use for a TM will preserve a trade/service name.
If under the written/oral agreement you were supposed to have 60% of the business, then you have a controlling interest and pretty much can determine the executive direction of the business yourself.
You state that you need an understanding of the business, and presumably you have it or can acquire it, so go ahead, check with a corporate lawyer as to limitations and if cleared, start your business.
As a franchise attorney, I basically agree with what the other attorney says, but more information is needed. Were you paid for your research, business plan, etc? And if so, how - as an employee or an independent contractor. These factors, in addition to the presence (or absence) of a nondisclosure - noncompete agreement, will influence the ultimate outcome. Ownership of the work, if you were paid for it, is questionable. If others are already doing this, it's difficult for your client to say his idea is proprietary. But you should sit down with a good intellectual property attorney in your area to review all documents and circumstances.
Kevin B. Murphy, B.S., M.B.A., J.D.
Attorney at Law
Director of Operations - Mr. Franchise
FRANCHISE FOUNDATIONS APC
An idea as such for a business cannot be protected by copyright, trademark or probably by patent. (Some methods of doing business can be patented, but the range of those is limited.
If you were this other fellow's employee (not contractor) then it is possible the business plan itself is protected by copyright, so you could not take a copy to a lender to get finance.
The name you were going to use for the business can be protected by trademark if it is fanciful enough, but not until it is actually used, which you say it has not been.
In future, as another lawyer has said, get your arrangements in writing. To ask for a writing does not express distrust of the other but a desire to make sure both sides agree on the specifics.
It would depend on the nature of the business "idea" and any agreements you might have made, oral or written. Generally, just starting your own business in the absence of any agreement to the contrary based on a certain business model is fine. Also, you would probably have ownership of any work you completed until this time, again absent any agreement to the contrary.
You should bear in mind that you are personally liable for any obligations or damages as you are currently operating as an individual. Whatever your intentions, one way or the other you should organize a business entity to protect you from liability and formalize operations from here on out.
You should also put any further agreements or arrangements for business relationships in writing, to avoid any confusion and have good legal footing. Try to resolve things with the previous "partner", so as to avoid future legal confusion and not have any potential problems. A good business attorney should be able to assist you with this.
Regards,
Michael J. Duffy, Esq.
Duffy Law, LLC
1-888-414-5773
www.mduffylaw.com
1500 Market Street
12th Floor, East Tower
Philadelphia, Pennsylvania 19102
52 Berlin Rd.
Suite 3000
Cherry Hill, NJ 08034
[email protected]
Q: "The person with idea initially said that I could have 60% of the business and it was understood that I would be running it and that person would be doing whatever they could ... ."
R: So ... what did you say?
If you said, for example, "Ok, I'll set up the business that you envisioned in exchange for 40% of the net revenue that we earn" then you quite likely have an enforceable contract. Specifically, you likely have to pay the other guy 40% of what you earn even if he doesn't lift a finger.
But if you said, for example, "Hmm. I'll look into this proposition and get back to you on whether I want to get involved or not and, if I do, how we're going to divvy up the chores and revenue" then you quite likely do not have an enforceable contract.
The relevant law is "implied contract law" which differs from state to state. You need to speak with a business attorney licensed to practice in the state where you live. Good luck.
