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Can you Take Clients with You When you Start a Business

After spending a significant period of time working for someone, you might want to launch your own business that may be a competition to the former employer. The situation is, without a doubt, beneficial to you, as you have a prior experience in the specific line of business. However, it is a nightmarish situation for the former employer.

Once you have decided to launch the business, there are a few legal factors that you might tend to overlook. Business employers often gain from a binding contract or an agreement that prevents its employees from becoming competition to the business. For instance, an employer will have an agreement which states that the employees are prohibited from contacting the firm's customers or clients for 6 months or a year after, starting from the time they leave the organization. In some other cases, agreements also prevent the employees to start or work in the same line of business in the same city or state.

Most of the states in the U.S have resorted to a form of statute called the “Uniform Trade Secrets Act". This prevents an individual from making use of the former employer's trade secrets even though there are no agreements or contracts.

Bearing such factors in mind, there are some guidelines you can follow. Never contact a client if he/she is a close contact of the former business. Try and avoid special discounts to only a few clients. If there is a discount, make it applicable to everyone you know. When you leave the business, avoid taking the client files with you. This works because you can focus more on creating new customers without the fear of legal offence. If you want to approach the old clients, proceed only when the stipulated time period on the contract is over.

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