Starting a Software Company. (attempt #2)

[GaryK4]

What is the name of your state (only U.S. law)? NC
I have developed an ERP system that I plan on beta testing with a company in KS in a week or two. I don't know if the company or software will fly, so I would like to keep expenses down. We found a boiler plate Beta Agreement on the internet that I will have the beta company sign. The test period will be (6) months and no money will be exchanged during this period. So far, I have created a website with my own domain name and registered the conpany name in NC (DBA).

Questions:
1) Do I need liability insurance during this period?
2) If the software is successful, I plan on going to a LLC prior to production release - correct?
3) I have not contacted any lawyer on this project to date for cost reasons.
4) What else should I be concerned about or actions should I take.

 

[quincy]

What is the name of your state (only U.S. law)? NC
I have developed an ERP system that I plan on beta testing with a company in KS in a week or two. I don't know if the company or software will fly, so I would like to keep expenses down. We found a boiler plate Beta Agreement on the internet that I will have the beta company sign. The test period will be (6) months and no money will be exchanged during this period. So far, I have created a website with my own domain name and registered the conpany name in NC (DBA).

Questions:
1) Do I need liability insurance during this period?
2) If the software is successful, I plan on going to a LLC prior to production release - correct?
3) I have not contacted any lawyer on this project to date for cost reasons.
4) What else should I be concerned about or actions should I take.

Your "attempt #1" was reported and deleted because it contained a link that could be seen as an advertisement for your company. I am glad you decided to leave the link out in your "attempt #2."

First, all new companies should budget for an attorney's personal, overall review of the company's proposed operation prior to start-up. It is an often overlooked, but important, part of starting a new business. The lack of such a review can wind up being a costly mistake for the company.

You have invested time, effort and money in the development of your software, and you will be investing money in the testing of the software. Both your beta tester and you/your company should be insured to protect this investment. Your tester should have insurance to cover any loss, theft or damage that occurs to your software while it is in the tester's possession. You should have indemnity/liability insurance.

When you want to form your LLC is ultimately your decision. It is a decision best made after all facts, including financial facts, of your business are personally reviewed by a professional. We cannot do personal reviews on this forum.

While "boiler plate" agreements can be used as guides, they cannot be relied on to cover all of the particulars. It is always best to have any contract/agreement tailored to the specific individual wants and needs of the parties involved. Two things you will want to make sure are included in your contract with the beta tester is an IP rights clause giving the tester a non-transferable, non-exclusive license to use your software during the period of the testing (with this IP rights clause drafted carefully to protect your rights in the software) and you will want to make sure your contract with the beta tester includes a non-disclosure/confidentiality clause. All terms of the agreement are best reviewed by a professional in your area to make sure everything that needs covering is covered.

I guess the bottom line, Gary, is that a forum cannot really address your concerns adequately. I again recommend you sit down with a business law professional in your area for assistance during these important early stages of your company's life.

Good luck.

 

[quincy]

bumping this thread to the main board due to a deleted/reported thread - this post will be deleted once the other thread is removed in its entirety