Question
Scenario:
• Two individuals agree to start two startups together.
• One individual resides in Canada.
• The other individual resides in the United States.
• The Canadian individual requests a partnership agreement
from day 1, however the US based individual creates reasons to not have one yet.
• The Canadian-based individual incorporates a company in Canada as the umbrella company for both startups, with no agreement with the US-based individual yet. So the Canadian corporation's shares are 100% assigned to the Canadian individual in the "meantime" until an agreement is reached.
• Discussions lead to conclusions that the US-based individual will get 30% shares, when an agreement is signed.
• The US-based individual was given an email for the Canadian based corporation, and began to work/associate work with both startups under the Canadian corporation.
• After 3 years of pro-bono "partner" work as investment into the Canadian-based corporation, the US-based individual never signed an agreement yet.
Questions:
• Given that work was completed by the US-based individual ("partner") and he was operating with no agreement under the Canadian corporation's environments, emails, discussions - does the Canadian corporation retain rights to the work completed?
• If the US-based individual ("partner") decides to take one of the startup's intellectual property, work (which was completed by both the Canadian-based individual and US-based individual) etc, and setup a US-based corporation with it, can he get sued? Or is he safe since he never signed an agreement with the Canadian-based corporation?
• Do legal entities in the United States take lawsuits in performance / win payout shares (if the case is big enough)?
Answer
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