Legal Question in Business Law in New Jersey

Disposition of patent in the event of partner's death

A friend and I are starting up a company that will have manufactured an item that he owns the patent for. We have not yet formalized our business agreement, and there is one area of this whole deal that has me deeply concerned: What happens to me and the company in the event of his death since he has left the patent to his girlfriend in his will?

I know that he did this before we started this company, so it is not going to be an easy thing for his to take back, yet I am not going to go into to business with this person if I am put into a position where I could potentially lose everything in the event of his death (because the company is worthless/out of business without the patent)

So, here's my question: Is there a way that our partnership/business agreement can be written to protect me from having his girlfriend take the patent and leave me with nothing to produce in the event of his death?

Thanks for your attention!


Asked on 2/14/01, 6:51 pm

2 Answers from Attorneys
Edward Weinstein Law Office of Edward R. Weinstein

Re: Disposition of patent in the event of partner's death

Thank you for your inquiry.

What you need is called a Buy-Sell Agreement. As my office drafts many of these types of agreements, please contact my office at 732-246-0909 to discuss your case.

Very truly yours,

Edward R. Weinstein

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Answered on 3/30/01, 9:11 am
Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: Disposition of patent in the event of partner's death

Your problem is not particularly unusual in setting up a business. First, you and your partner need to determine in your own minds what you each think the business will be and what are your particular roles (i.e., what you each "bring to the table.")

You should each be represented by separate counsel and you should have an Agreement to Form a Business negotiated. Next would be the formation of the business.

You should consider various forms of business entity, especially the Limited Liability Company. My web site has a free section to help you determine the best form of business entity: http://www.taxesq.com/choice.html. You would be wise to have a good tax and business lawyer establish the business entity and help you with the legal minefields.

You would then have a Shareholder's Agreement or Buy/Sell Agreement prepared.

Before you go any further contact a tax and business lawyer!

I hope this helps!

Ronald J. Cappuccio, J.D., LL.M.(Tax)

Counsellor at Law

856 665-2121

[email protected]

http://www.ebusinessesq.com/

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Answered on 4/01/01, 7:55 pm


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