Incorporation Memo

This memo discusses legal advice the company should seek during its start-up stage. Specifically, the company should seek advice about incorporation first. Incorporation is imperative for your financial protection. Next, this memo will discuss the advice needed for employee contracts, intellectual property, customer terms of use, and a research memo as they will enhance the company’s financial protection and limit potential lawsuits.

Business Background The company, NuSoft, develops mobile applications, specifically, games and productivity tools. The company is located in Redmond, WA. Incorporation Incorporation creates a specific type of business entity with the state that can limit personal liability and provide tax benefits. If you

As Essentials of Business Law states, “owners of the LLCs are called members.” LLCs provide members with limited liability like corporations and allow the members to choose between paying taxes as a corporation or a partnership. Either way the company pays taxes once, but the members get to decide the tax bracket. Partnerships have a lower tax rate on small profits, and corporations have a lower tax rate on large profits. LLCs can be member or manager managed. Member managed LLCs make decisions by majority votes between all the members. Manager managed LLCs select a group of people to make decisions and manage the

NuSoft can use laws that are more favorable for them, i.e., the company is more likely to win a lawsuit. NuSoft should state any lawsuit would follow Washington state law. Forum Selection is different from choice of law, because a court does not have to use the laws of its own state.

Privacy Waiver: The employee must waive their right to privacy on the machines and e-mail provided by NuSoft. This waiver allows NuSoft to track employee use of their resources. The employee cannot sue for violation of privacy, because NuSoft gave them notice.

Why Are Employee Contracts Important?
Employment contracts add another layer of protection. Having written employee contracts is important for tech companies. Written contracts prevent employees from starting competing companies and stealing intellectual property. Employment contracts prevent employees from suing and stealing from NuSoft. In addition, they ensure there is nothing vague about the terms of employment. If NuSoft does not have strong employment contracts, they open themselves up for costly lawsuits. During a lawsuit, having these provisions also limit NuSoft's financial liability and gives NuSoft more