Legal Question in Business Law in California

You can't purify an illegal act by keeping it secret, no lawyer would so advise you, and the secret would eventually come out if your business were successful.

However, you may be worrying excessively. If you invent something patentable, do it on your own time, using your own laboratory and other resources, and let's hope it is based on knowledge and ideas not too closely related to your present employment.

California law encourages competition, including competition by ex-employees against their previous employers. At the same time, it forbids misappropriation of trade secrets, and discourages use of employer time and resources (computers, etc.) for anything outside of what you're paid to do.

You weren't very specific about how closely the ideas and other intellectual property the new business will use relate to the business of the current employer. The closer they are related the higher your risk of accidentally or intentionally misappropriating a trade secret. Also, without seeing the particular intellectual property clause in your employment contract, I can't speculate on that it forbids or purports to forbid. Clearly you can't infringe the company's patents, trademarks, etc., but that would be true with or without the clause. On the other hand, if the clause is over-broad it will be unenforceable to that extent, and some employers do overreach a bit in their employment contracts.

My overall thought is that if you feel you need to keep the new LLC's existence a secret, that's a tipoff that your plans may include acts that are (a) in violation of your employment contract, and/or (b) illegal anyway. You should limit your activities to things you can be open about. In order to determine whether your proposed LLC is "clean," you should talk to a business lawyer under circumstances where you can explain (1) what you and your present company do, and (2) what the proposed LLC will be doing. In other words, buy a few hundred dollars' worth of prevention -- the cure for misappropriation, etc. is much more expensive, even if you win in court.

No insult intended, but your questions make it clear that you need proper legal advice and assistance in forming this company and staying out of 'costly' legal trouble, in several respects. A few hints and tips from here are going to do you no good. If serious about getting that help, feel free to contact me.