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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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I formed a company as an LLC in NM with a partner in 2006.

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I formed a company as an LLC in NM with a partner in 2006. His mother loaned us $35,000 to get started. The checks she wrote to us all say "Loan". He left the company after 8 months citing that I was too demanding and that we ran out of money - which is true. 2 years later, I started another company in NV as an s-corp without "The" in front of the name of the company. He has not worked for the company since. I am now starting a new venture that will utilizes some of the things I invented while working under the s-corp. Additionally, I will be assigning these inventions to a brand new company with an investor in about 30 days. Am I vulnerable to his pursuit if my inventions eventually bear fruit? I am willing to assume the company loan from his mother as a personal debt in order to prevent any possible pursuit. I just want him to be satiated so I can grow my new company with my new partner (and his investment) in peace. Thanks for your thoughts.
Submitted: 4 years ago.
Category: Business Law
Expert:  MShore Law replied 4 years ago.
Thank you for the post, no you are not vulnerable to a lawsuit from your former partner based on inventions created under the name of the S-Corp. The intellectual property of the S-Corp is not the property of the LLC.
Customer: replied 4 years ago.
I met this new investor/partner after my former partner left but before I closed the LLC. It was 10 months into this new relationship that I closed the LLC and started using the S-Corp. I've assign all of my creations from the LLC to the S-Corp after I closed it. And then in 30 days my new partner and I will assign all of our collective creations to a brand new C-Corp - which is the venture partnership which my new partner will be investing in. Is that okay? What do I need to do?
Expert:  MShore Law replied 4 years ago.
Thank you for the additional information, you need to get a written statement from your former partner that he does not wish to make any claim to the inventions or intellectual property of the LLC. Hopefully, he executed a notice of termination or something of the sort when he left the LLC, if so, the written statement would not be necessary.
Customer: replied 4 years ago.
He signed a notice of termination along within the contract that he said he signed "under duress". I believe all he really wants is for me to commit to paying back the $35K. BUT I need to be careful not to tip him off that I'm now creating something new with inventions he has not seen or heard of. (things I came up with long after he left). Given that he didn't sign a letter of termination (or feels the closing of our business contract was signed under duress) Is this possible? Do you write this type of contract?
Expert:  MShore Law replied 4 years ago.
Hello, from your description your former partner would not have much of a claim against you because the inventions were created after his departure, as evinced by the execution of the notice of termination. Duress is defined as a compulsory force or threat, from your description this would not apply.
Customer: replied 4 years ago.
He said that he was "under duress" because I said I would have to shut the company down if I had no way of having closure with him. He said (6 months after signing) that it was a threat. I had to close the company anyway to start fresh. So it sounds like I'm okay. I'd still like a document with him so that there are no issues with my new partner/investor. Can I hire you to write this up? Is this something you do?
Expert:  MShore Law replied 4 years ago.
That does not constitute legal duress. You could get a document drafted, but it does necessary based on your description.
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience: Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
MShore Law and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
Thank you for your help.
Expert:  MShore Law replied 4 years ago.
Thank you, XXXXX XXXXX good day.

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