LLC) under Chapter 25.15 Revised Code of Washington (RCW) to form Characters Galore (See Combs 26). The LLC would allow Jeff to act as the manager while the other three share equity and participatory interests.
Also, limited liability could become an issue for potential tort claims arising from workers involved in the manufacturing business. Particularly given the volatility of the relationship between Darlene and Brian and the problems those individuals pose (to be discussed later), limited liability should be a concern for Jeff. Jeff should form the LLC as a means of developing Characters Galore, but should be aware that the LLC form cannot be used when the company decides to go public. For this reason, Jeff might want to consider forming a corporation with himself as president and John, Darlene and Brian as employees with stock options. The corporation could then be taken public without having to change its form. The corporation, however, will suffer the usual corporate tax consequences during the development phase.
Non-disclosure and non-competition agreements are enforceable under Washington law (See Reilly, n.p.). Darlene can also be subject to civil liability if she reveals any trade secrets from her time at the Museum in her new employment (See Chapter 19.108 RCW). However, the mere existence of the non-disclosure and non-competition agreements will not bar her from working for Characters Galore (CG), although she will not be able to use any specific designs she created whi
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