When he created Facebook 26 year old Mark Zuckerberg made his fair share of enemies. He was accused of stealing the idea for the website and allegation that will now play out on the big screen. Your best friend is suing you for $600 million. I didn't know that Tell me more. Social Network. Hollywood's take on the web's biggest drama portraying Zuckerberg as a socially awkward, self centered computer geek who stole the idea for Facebook from his friends as depicted in the film.

The alleged betrayal paid off big, but it didn't come without a cost. Zuckerberg his former classmates identical twins Tyler and Cameron Winklevoss, sued him in 2004, saying they hired the computer prodigy for help with their social networking site months before Facebook launched. But Zuckerberg decided to steal their ideas and the business plan and to launch his own website. And as now we know, back in 2012 when the Facebook IPO happened. The Winklevoss twins had a lot of money because they were given so many shares in Facebook and cash. That it proves that they in fact, came up with the idea for Facebook and they were compensated $300 million.

I mean, it's not bad. I know that Facebook's worth billions. But still, they didn't actually have to do any work. He did most of the work, and so did the developers and other employees at Facebook. So they walked away. But there's a lesson here, cross your T's and dot your I's.

Always have your paperwork. Even if you aren't a super big company and you're just a fledgling little startup who's bootstrapping, you should still protect yourself. It doesn't take that much to do either. A lot of people think it's very confusing, and there are so many documents you need, and everyone immediately runs to a lawyer and pays thousands of dollars to create all of these documents. But let's talk about them. An article of incorporation is basically just a piece of paper.

That says you incorporated your company. And I'm going to show you how I did it by going to Google, and you would type in form an LLC. In my case, pa for Pennsylvania, wherever you're from type in your state. And you'll find some documents instead of going to illegal zoom or, you know, another one of these websites that charge you to do it, which is fine if you really don't mind paying the extra money, but the truth is, every state has their own website. And if you click on the website, you'll be able to find registration forms. So for example, if I want to incorporate an LLC, limited liability company, I would click on Certificate of organization.

And I would just fill out this information, my name, the name of the company, address. A couple of things here, a couple of things there and then I would sign it it's so easy because $125 Okay, so when you go to these other websites and they charge you 300 400 $500, all you really need to pay is 125. That's it. So that's what I recommend is download the form, fill it out, it takes literally 10 minutes, not even five minutes if I can fill this out in two minutes. So, why spend all this money on some website if you can just do this? a nondisclosure agreement is an NDA, this is something that people sign that says they will not steal your idea.

They will not copy your idea. They will not use your idea. After you tell them your idea, they will not steal it. So it's it's a nondisclosure means they cannot disclose the contents of what you tell them to somebody else or use the ideas. That's what an NDA is. Investors won't sign them.

People like me won't sign them. We see too many ideas every day. So it's just too much for us to to sign them. You really want complete strangers who are not investors who you're planning on adding to your team to sign an NDA. So if you have potential marketing people or developers that are going to join your team, have them sign an NDA. And I can show you if you want, I can show you what one of these looks like, although, keep in mind that's blank, because this is the repository that I sell.

So the names are going to be, you know, company name, this is where you put your name. But it basically says, you know, can't tell anybody any of these things, drawings, designs, product plans, finances, marketing, engineering, and it goes on and on for pages explaining, you know, the types of things that you can't do. There's copyright infringement, and there's a lot of things in here, and then you sign it at the end. And that's that when it comes to employee contracts and offer letters, IP assignment agreement, the bylaws, the operating agreement, shareholder agreements, these are all contracts that you need in order to make everything legitimate in your company. I have a repository that I sell To entrepreneurs that has all of this board of directors, minutes, consultant agreements and confidentiality and invention assignment, corporate documents like IP assignment and operating agreements, you need a certificate of organization and articles of incorporation, your NDA and stock option agreements, exercise agreements and common stock certificates.

And it's a lot to take in, I understand that there's a lot of things here. So I'm just going to try to explain these one by one. An employee contract an offer letter is exactly what that is you're offering somebody a position or a job in your company. So you're going to give them a letter that states the offer, their compensation, what job they have, and the terms. The employee contracts get a little bit more in depth. You have something called an exhibit a, for example, for a developer, this would be at the end of the contract, it tells them the types of things you expect them to do.

And I gave this to a developer so they had to do this job this these things. If they don't do half of these things, actually 30 days, 60 days or 90 days, whatever you decide, then you fire them. Because you have this in the contract that says you were supposed to do all these things and you didn't do them. So that's why you want to have these contracts in place. The IP assignment basically says that you no longer own the intellectual property of the company, you are assigning it to the company. So if your name is john, and your platform is named, snap dog, john no longer owns the intellectual property, he is assigning it to snap dog Incorporated.

So you no longer own the idea. You no longer longer own the IP the company owns because that's what that way when an investor gives you money for your company, he's investing in the company, not you, by laws are basically pages and pages of legal jargon that explains what the company is going to be doing kind of like the operating agreement. These are pretty similar. It basically is your Bible. It's the company journal. It tells you what the company is.

Terms are, who owns stock. You know what kind of rights you have, what kinds of rights your employees have, and so on and so forth. So you need to keep track of that and consistently update it when when you make changes. And then shareholder agreements are for your investors and for your shareholders, to let them know of all the terms and conditions of your company.