Q: Registered LLC and co-founder question
The LLC was registered last May and I invited one of my friends to work together in September last year. Currently, I have 100% ownership. My friend wants to have 35% ownership. But based on his contribution, this percentage is too much high. We don't have any agreement in written so far. But I am worried that he may use my business model and found his own. Secondly, my employer doesn't know I have a LLC registered. If my friend discloses my information and LLC to my employer. I may have big issue. But can I sue him to disclose my information and cause economic loss?
A: This is a prime example why people who want to set up a business need to retain an attorney to prevent problems, especially when you mix business and friendship. A one member LLC is useless. I would never set up less than a 3 member LLC for any client. The next thing you need to do is have your "friend" sign a document which is known as a non-compete, non-disclosure and non-circumvent agreement. You did not indicate how your LLC could negatively impact your employment with your employer, so that portion of your question cannot be answered. I am also certain that you did nothing to protect any intellectual property your business may have, including, but not limited to your business model. Anyone who wants to find out if someone has registered an LLC can spend 10 to 15 mins on the Internet to learn about it. Do not let geographic restrictions get in the way of retaining the best attorney. Pick the best attorney you can find and remember one rule: a good attorney is generally never cheap, and a cheap attorney is generally never good so don't choose based on price.
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