can someone form an LLC specifically and solely based on another individual's work/product -- without telling/consulting them? A *LOT*--
posted by msshe to work & money (27 answers total) 6 users marked this as a favorite
Of course, I know that I would need to sign something to be legally bound to an agreement, but I'm completely perplexed (and angry) and trying to figure out why this happend:
I am an artist, (paintings), only recently doing my first shows/sales. Lot of committment and significant financial support from my non-romantic partner/housemate/best friend who offered me this ipportunity to develop my work with his financial support. Statements of paying him back entailed "I don't expect or require anything, but if you become a huge success, it would be nice to know you could pay back something. I wouldn't turn it down." This statement did not change until recently---when I made my first
I had formed a business identity for myself, with cards, print materials, logo, typeface, and I was in the process of building my website under my trade name which I expected to use to encompass all my current and future actions as an artist.
I then went out of town for the holidays (2000 miles out) and was gone for several weeks. During that time I got an email from my friend saying that he had formed an LLC under my artist name/identity (using it for the name of the LLC) and did this primarily becuase he realized that he could get a tax advantage if he formed a company quickly, and he also decided that making himself sole owner of my trade name would entice me to
work on an agreement with the company in which he would also own everything else I've created and will create in the future (all rights, everything) because I suddenly "owed" him a specific amount of money for his contributuions to me and my art, which is the same amount of money he submitted for expense deductions for his LLC. These included the $500 for the accountant to set up the company, my christmas present, food purchases he told me to make, items for his home that I did the physical picking out and bringing back to the house, insulation in the room I use as a studio... cash he gave me when he was gone for a week with the car and groceries were needed. Airfare that he loaned and was repaid, etc. I am expected to repay him for all these things--wasn't even in the state when he purchased a $400 tool!
Needless to say, I refused to agree to have my name taken without my consent or knowledge, and registered as a legal LLC basically making it impossible to protect it myself (I didn't think it was necessary since i had just started out.
He is attempting to coerce me into entering into an agreement whereby my art is owned by this company, and to which all profit go. THe company will still pay for art supplies, and if and when my debt is "paid off", I might be "cautiously" considered for a share in the company. Unfortunately, as described, if I continue to owe and incur debt for the expenses of the company, that will never happen.
I don't understand how this could in any way be legitimate, and I am not doing anything with this person and I have insisted that he release my name so I can register it myself as planned. He refuses, stating that he did this for my benefit and thinks it would be a waste to use another name for his company.
If, on the slim chance, I were to enter into an agreement (that I knew about and was consulted in), I would expect to represent myself as (my business name) and form the agreement with (other name LLC), retaining my IP and moral rights to what I create, regardless of how profit shares and such are divided.
Yes, I can just drop this and use some other name. Unfortunately I made a huge mistake and found a name that is personally meaningful and can't be altered and not lose that significance. I fully expected to protect it, and it is valuable only to me. My friend said if I refuse to consider working with him, he will just dissolve the company and let the name become available to "the next person who wants it" rather than change the LLC and at least give me warning so I can register it safely.
My friend seems to think that I am going to make some money with my paintings, and with my tiny, new start, it looks positive but that guarantees nothing. I am dedicated and I think I will only get better. This whole fiasco may have cost me my first solo show and reception in NY state, and that was a big deal. I am stuck for the moment and somewhat at the mercy of my friend, because we had been operating on a financial agreement that he just stopped when I balked at my name, and for the short term, I am stuck without repleneshing paint and its just a mess all around.
I am shocked that he formed this LLC, seizing my name and expecting to structure this entity based entirely on me and what I do--without saying a word to me (and expediting the process so it would be done before I returned to the studio/house--which he is also charging me for). He is bullying me into signing onto this company (with no rights or profit shares) with my name as leverage (which will not work, and I've made that clear), I think he may be afraid of what to do with this defunct company and having to justify those expenses.
I would really like some constructive advice--I'm ashamed and frustrated, so constructive criticism is welcome to, but I've already done the beating myself up part.
Sorry for the length. I would love some insight from any of you. There has never been any indication that this person was anything but trustworthy and decent. I don't understand. Are there legal implications I'm not getting? What could they possibly be? I don't have anything except my artwork. Only half of which is fine enough to sell.