Is it possible word a contract such that it brings in all the features of registering a company? I've just understood the concept of writing a contract. It is just an agreement between two people written on the paper and signed by all the parties involved. So, if it is possible to write contracts, then why do we need a specific law for companies? Can't we construct a company simply wording our terms and declaring all the rules of the "company" in a contract without registration? For example, one of the benefits of registering a company is its liability shield it gives us. So why not mention in the contract "no individual mentioned in this contract is liable..." (please forgive me if my question is naive). Another benefit of a company is, being able to issue shares. So to cover this, the contract could contain "All assets mentioned have a shared ownership. Each person in the contract is assigned certain 'ownership points' (a different word for shares). And these ownership points declare each individual's ownership of the asserts..." Couldn't we implement all the features of a company, one after the other, simply by writing a contract? Please tell me why this isn't possible and what I don't understand. And again, sorry for this naive question. I would like to hear this answer in the context of any country. Though I would be able to relate well, when answered in the context of India.
The liability shield is the big one, and it can't be achieved with a contract. Just because the contract says you're not liable, that doesn't make it true. If I sign a contract with my friend that says "Nate Eldredge is hereby the King of France", that won't make me the king, nor will it force anyone except maybe my friend to acknowledge me as the king. By its nature, a contract can only bind the parties to the contract, and has no effect on the rights of anyone else. Suppose, then, that Alice and Bob agree to start a pizza delivery business, using a contract like you suggest. Their delivery car crashes, injuring Carol, a bystander, who incurs medical bills that exceed the assets of the business. Carol decides to sue Alice and Bob personally. Sure, Alice and Bob have a contract, and maybe it prevents them from suing each other, but it certainly doesn't prevent Carol from suing them; Carol never signed it. So Carol can still go after Alice and Bob's personal assets. Thus contract law cannot give them a liability shield. However, the government can, since it makes the laws about who can sue whom under what circumstances. And it has made laws saying that Alice and Bob can be protected from such suits, but only if they form a company according to the process that the law sets forth. So that's what they have to do.
I did some research and found the information below. It took me a while to figure out that the issue is known in German as &quot;Insichgeschäft&quot;. The quotes below are translations from Wikipedia. The term self-dealing is also used in Switzerland. It is regulated in Art. 32 ff. OR. The Federal Supreme Court has consistently ruled that self-contracting is fundamentally inadmissible because it “regularly leads to conflicts of interest and is therefore not covered by the company's purpose”. The contracting of the agent with himself should only be able to develop legal effects in exceptional cases, in particular if either the risk of the person represented being disadvantaged due to the nature of the legal transaction is excluded (e.g. &quot;purchase of goods with clearly defined market or stock exchange prices&quot;), or if the representative &quot;specifically authorizes the representative to conclude a contract with himself, which in certain circumstances can also be tacit or approve the transaction retrospectively&quot;. Now since I am the owner of the business and my company would get a free exclusive license, I assume that the above mentioned exceptional case is valid: However, the risk of discrimination (and thus also the obligation to obtain approval from a higher-level or subsidiary body) does not apply if there are no other shareholders in the AG in addition to the body that has concluded self-contracting. The Federal Supreme Court has rejected the additional requirement that, in addition to the absence of further shareholders, there must also be no corporate creditors. Sole shareholders are therefore free to enter into individual deals. Therefore, such a contract should be legally ok. Finally, to be considered: As part of the reform of the GmbH, the company law (Art. 718b OR), the GmbH law (Art. 814 Para. 4 OR) and the cooperative law (Art. 899a OR) introduced the requirement of written form for contracts that the representative of the company concludes with himself, with the exception of contracts which do not exceed CHF 1,000.
is this absolutely required to be considered a valid document in most jurisdictions, most notably, the European Union? Not at all. There is no legal requirement that contracts, terms of service, and so forth be drafted, devised, or even validated by a lawyer. Law requires that certain types of contract be notarized. That refers to the moment where the parties sign/formalize the contract, which is different from --and independent of-- whether its terms were written by a lawyer. A messaging service like the one you have in mind definitely is not subject to such requirement either.
Ideas aren't property Your employer does not own your ideas. However, neither do you. Ideas are not something that is protected by intellectual property law. To be IP, you need more than an idea. What is IP? The most common types are: Patents - protect inventions and new processes Trade marks - protect logos, words and other branding Copyright - protects art, writing, music, film, and computer programs Registered designs - protects the visual design of a product Circuit layout rights - protect layout designs or plans of integrated circuits used in computer-generated designs Plant breeders rights - protect the commercial rights of new plant varieties. The normal operation of IP law is that if a person is engaged under a contract of service (e.g. an employment contract) then their employer owns all the IP they make which includes progress towards something that might be IP (e.g. all the work that leads up to a patentable invention). However, if they are engaged under a contract for service (e.g. an independent contractor), then the worker owns the IP. The work the employer owns is generally limited to work in the course of the employment. So if you are a software developer they will generally own all code you write that is useful for their business but won't own the romantic novel you write in your spare time. In either case, the specific contract can override the default assumption. What can you do? You can certainly use the idea for the app but you can't use anything that is subject to your employer's IP. That means you can't use any code or copy the user interface - it all has to be redeveloped from scratch. You also can’t develop something that would be of use to their business while you are still an employee.
They likely can. This information would likely fall under an NDA (Non-Disclosure Agreement) clause in the contract with the contracting company. The other clients of the contracting company could be considered confidential information, e.g., a client list, which can be covered by an NDA. An NDA will usually have a term for duration and a term for breach consequences. However, it is unlikely that an NDA would apply to prevent disclosure of other companies if the contracting company posts [all? | some?] of their clients publicly, such as in advertisements or blog posts online. For some more information, you may check out this post from LegalTemplates.
The inventor or would-be developer can require potential investors to sign a non-disclosure agreement (NDA) before revealing the details of the idea. In an initial letter a statement such as &quot;This idea is being disclosed in confidence to enable4 you to consider if you wish to invest in the project.&quot; That would put the investor on notice, and if the investor discloses it to another or makes use of the idea in a competitive project, there may be grounds for a suit for breach of confidence. If reasonable precautions are taken to disclose the information only to those under a duty of confidence, and to protected it from unauthorized disclosure, it may be protected as a trade secret, and any evasion of those precautions or breach of confidence may give grounds for a lawsuit. In the US the Uniform Trade Secret Act has been adopted by almost every state. In other jurisdictions there are other similar laws. As stated in the Wikipedia article A trade secret is information that is not generally known to the public; confers economic benefit on its holder because the information is not publicly known; and where the holder makes reasonable efforts to maintain its secrecy.
In other words, what is the difference between signing &quot;for&quot; a company and signing &quot;on behalf of it&quot;? Nothing. Companies are famously illiterate - they can't read or write and need someone with fingers to do it for them. In fact, everything that a company does is done through an agent. There is no difference between a document signed &quot;for&quot; a company, &quot;on behalf of&quot; a company, &quot;for and on behalf of&quot; a company, or one that's just signed. Modern usage is far less formal than it used to be and what you are seeing here is a holdover from a time when people used to put rhetorical flourishes on legal documents for no good reason: https://books.google.com/ngrams/graph?content=for+and+on+behalf+of&amp;year_start=1800&amp;year_end=2019&amp;corpus=26&amp;smoothing=3#
The contract would be binding Many people make the mistake of thinking that the document is the contract - it isn’t. The contract is the binding legal relationship between the parties of which any documents are just evidence for. As this is a simple mistake on the document misidentifying one of the parties, it’s irrelevant. You and the company are clearly the parties to the contract - you because you signed it and they because they sent it to you. Minor errors in one or more of the documents that make up a contract are immaterial.