Legal Question in Business Law in California

You could probably create another "company" on your lunch break from a computer connected to the internet (not your employer's computer, of course).

As long as you are not violating an in-term non-competition agreement with your employer or creating the new company on their time or using any of their proprietary information. Consult with an attorney in your area for specifics.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

Non-competition agreements with employers are often illegal and cannot be enforced, but as the other attorneys have pointed out, the current employer could have some valid objection based on use of company-paid time or equipment (computers).

The most common problem, however, is misappropriation of trade secrets. You didn't say whether your proposed business would compete with your current employer's business or not, but if it does, keep in mind that the law encourages you to compete but it forbids you to do so by such means as running off with the Sales Manager's Rolodex or the Research Director's lab results.

So, form a new business, yes; but do so with the current employer's assets, no, no, no!

"Legally"? Sure. You just risk being fired and sued for conflict of interest, or unfair competition, or violation of non-compete agreement, or misuse of company time and assets if you do anything for 'your' company' on 'their' company time.

As you can see from the responses, I think it is clear that an attorney would need more information to properly advise you. It is also not clear what kind of company you are trying to form, and problems could arise if you direct your employer's clients to your business.