Freelancer Legal Concerns Explained

Summary

Freelancers working with startups should ensure they are legally protected. Verify the companys structure and ensure it is properly set up. If the new venture isnt structured as a subsidiary, it might lack legal protection. Consider seeking a written indemnity clause in your contract to protect against liability. Consult a local attorney for detailed advice.

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Hi there! I am a freelancer and contractor who just started a new contract with a Pre-Revenue SaaS Startup. I am serving as a fractional COO, and the more I learn about the limited company structure, the more concerned I am the closer it gets to product launch especially since key aspects of my role are sales and marketing cultivating strategic partnerships. The company is registered as an LLC, well during initial development the founder pivoted into a completely new product, website, and even a new name with completely different brand identity. However, this new concept is not structured as a subsidiary of the original LLC. I am not even *% sure it is, from a business operations prospective, set up at all outside of the original LLC concept efforts. All current independent contractors and contracts list the original LLC then told about the new company, product, and direction. I am concerned aiding in marketing efforts and soon sales efforts by creating partnerships agreements with the original LLC name. I have had a few roadblocks, yes, mainly as we get close to product launch I want to make sure I am legally allowed to market and sell this product without fall back on me for the founders failure to set this up correctly. They specifically stated this company is not currently set up a a subsidiary to the original company but they are wanting to set it up like that after revenue starts coming in.
Hello ****, your concerns are valid. Here are a few points to consider:
- If you're working under the name of the original LLC, then legally, you're representing that entity.
- If the new venture isn't structured as a subsidiary, it might not have legal protection.
- If you're concerned about liability, consider seeking a written indemnity clause in your contract.
You should consult a local attorney for detailed advice.