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Can employee establish a LLP while still being employed with an IT product company?

By Ammerender Singh on 9 Comments / 2493 views

Hi All,

I am seeking advice regarding incorporation of my firm. Our firm/ startup will be serving corporate client and we need LLP ( I am preferring it) to enter into legal agreements. Problem is that one of the partner is still employed and will be working part time till sometime in future. What I need to know is: –

A) if my partner will be violating any employment contract by being part of LLP

B) If his company can sue partner/ LLP in future for IP created by us? 

C) What will be liability of LLP if partner is sued for IP creation (since IP created resides with LLP)?

Few points: –

 -Partner’s company do have employment term that says an employee cannot be part of any other concern while being employed but some of the other employees are working on their own ideas/startups – but none is established as far as I know – I was ex employee 🙂

– Our business is different from the firm where my partner is employed as of now

– We are company in transportation domain ( shared transport – more on launch) and currently working on app/ web products for the same.

– We will need a registered entity as we will be dealing with corporate clients.

Thanks,

Ammerender

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9 Comments

  2. You really need to see your partner’s employment agreement to answer these questions. Without seeing that contract, it is difficult to say anything.

    However, they cant really sue the LLP – they can at best ask for damages from the partner in question, as he is the one who has a contract, not the LLP – and that contractual liability is personal for him, not taken up as a partner of the LLP – so the LLP will be safe. They can not probably get to your IP in any case. 

    The best practice is to disclose all this to the employer in writing and record their no-objection through e-mail. If the LLP is not competing with the employer, they may not have a problem.

  3. Rahul, I believe under the new Companies Act conversion can now be done. The act is yet to get notified though – but it is reasonable to believe it will soon be enforceable law.

  4. Hello Ameerender,

    About the Legal liabilities I guess we already have a lot of the Legal Eagles to advise you on the same so not touching on those parts,

    I read the TRANSPORTATION Domain in your post 🙂 Shared transport so just wanted to let you know of a few posts you can refer and interact to work on or also to check if these can help you understand more about it when you do Launch though, Good Luck!!

    Let’s change how Mumbai Travels! Geeks wanted!

    Also from Mumbai : 

    Traffline offers real time traffic information in major cities in India. http://www.traffline.com, http://www.traffline.blogspot.in and https://twitter.com/traffline is helping commmuters to find the congestion free road, show the route from one place to another and gives estimated travel time of journey.
    TraffLine Facebook Page And another here too

    Check this Interview here for something Out of India

    The Vision For $3.4 Billion Uber Is Much More Than Just A Car Service, And It Could Vastly Improve Our Lives!!

  5. Thanks Ramanuj. Will keep it in mind. We are still thinking if incorporation is really needed or not at this stage.

  6. Thanks Rahul. Will keep in mind. I am planning to meet one of my CA friend next week. Thanks once again for your help.

  7. Thanks Darshan. I am aware of few of them. Also, there are two of shared cab/ carpool services in Bangalore itself – Ridingo and Cubito – sort of competing services :).

    I am working more on cab sharing/ auto sharing app and we are primarily focusing on creating community. Thanks a lot.

  8. If you are looking at integrating the Missed call verification, connect with Rahul Ambardekar or Aman Jha Then there are a lot of other App developers on both iPhone and Android platforms if you specify your requirements in Technical details 🙂

    As far as connecting with actual car owners and participating members for shared / Pool car services it needs to be Localized as well based on territorial regions. Raxit had demonstrated the same at one of the OH for TRHS members attending hence the reference provided. Good Luck!!

  9. #itoldyou check it up 🙂 Now they are in Bangalore too https://www.uber.com/cities/bangalore 😀

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