Looking for some legal help, guidance, support. Interested in starting a two person business and already have a product designed and created that uses other manufacturer products as accessory options. We are thinking of registering as a LLC, or LLP, to operate with some degree of protection from costly lawsuits.
We are two students looking for affordable legal help for patent, registration, and protection from any legal liabilities in Southern California.
Do we need to meet specific criteria, prerequisites to operate as an LLC or LLP?
We'd like to operate with some protection of our machined product.
Thank you for your time.
4 Answers from Attorneys
If you are talking about a company to manufacture/develop a product then you would want an LLC (Limited Liability Company) rather than an LLP which refers typically to organizations of certain professions like a law partnership.
BEFORE you disclose your product and the process of manufacturing to third parties who are not your lawyer you should have those individuals to whom you are disclosing sign a non-disclosure/confidentiality agreement.
You should be aware that obtaining a patent is typically fairly expensive.
I would be happy to discuss your options.
J. Caleb Donner
I would agree with the attorney above. A limited liability partnership will likely not be good enough protection for your and your partner. Additionally, you may want to consider a Corporate structure, which maybe more advantageous depending on your business and operational goals.
Should have you additional questions, feel free to contact me.
I agree with the foregoing answers that a corporation or LLC should be your top choices, and I do not have a strong preference between the two for your proposed business. Forming and maintaining either will entail some modest start-up and on-going payment of fees to the state. If you are going to operate in California, there is no advantage to forming your Inc. or LLC in a tax-haven state like Delaware or Nevada.
Further, operating a true business enterprise requires some minimal level of knowledge of business-management skills and legal prerequisites; not much, but some. Therefore, I suggest your co-promoter and you invest in and read two or more of the popular-press (non-technical) books on forming and operating your own business (corporation, LLC, or whatever). Such books are widely sold in bookstores and of course on-line by Amazon and others. Start with Nolo Press as a basic publisher, but get at least one published by someone else so you get an assortment of ideas and advice. Also, make sure whatever books you buy (most are large-format paperbacks, not too expensive and pretty easy to digest and use as references) are oriented towards California law.
In addition to educating yourselves about general business formation and operation laws and procedures, you may want to look at the publishers' tomes relating to intellectual-property protection (by patents, etc.) for beginning inventors.
An LLP is not applicable to your business. You will need to decide between a corporation (probably SubS) or an LLC in order to protect your personal assets, assuming you keep the entity's business separate from your personal activities. The tax tail may wag the business dog on this issue, so your tax advisor should be involved.
You will need to obtain approval, better yet, licenses, to sell other's products in association with yours.
You will need trademark protection. Patent protection should be decided by a specialist patent attorney.
I am experienced in all of these items, except patent registration, which is a specialty. Please visit my website at: bealbusinesslaw.com/business.htm for further facts and fees.
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