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Ask HN: Can I legally own the entire intellectual property of my SaaS company?

• davismwfl 6y ago
  So at least in the U.S, yes and no. This can get complex to do legally, properly and to not be seen as a sham by the courts. Nothing I am saying is tax or legal advice, just some generic statements that you would need to have legal and tax help on in your state etc. But generally, yes, you personally can own the rights to things your company uses, and you can take "royalty" or "license" payments from the business for those, which is a different type of income versus salary. Much like you can rent office space to your company and that is also treated differently tax wise. To be clear though, most of the time you don't want to own the technology behind the business because if it is deemed faulty and causes a major problem or has a major security bug etc a client can sue not just the business but you personally for all your assets since it is your direct property and that will move forward in court, you will get no personal protection. The corporation is there to protect your personal assets, you get none of that protection if you own the assets the corporation uses, in fact you make yourself a target instead. At the extreme end, if the company is but a shell and you own everything personally the courts could rule your corporation is invalid and not the true legal entity and so they could strip the company and you of the protections. There are a ton of rules around this that a competent, experienced business attorney needs to advise you on. Frankly if you are not even in business yet and aren't making money you are worrying about the wrong problem, get customers, get business, make something, then optimize corporate structure once things are really moving and you have income coming through the door. Because until the company is making more then it is losing no one is generally going to sue and spend money on attorneys to get nothing in return. They might sue to get the assets but even then that is really rare, and usually most larger businesses will force you to vault your product anyway in case you go under as their protection so they don't need to sue.
  • krn 6y ago
    > To be clear though, most of the time you don't want to own the technology behind the business because if it is deemed faulty and causes a major problem or has a major security bug etc a client can sue not just the business but you personally for all your assets since it is your direct property and that will move forward in court, you will get no personal protection. Thank you very much for this, that's exactly the kind of general advice I was looking for. This question came up to me after reading somewhere, that VC-funded startups are expected (required?) to form separate legal entities for holdings and operations in order to protect their assets. Also, there was a story of then-CEO Adam Neumann registering and leasing the "We" trademark to WeWork. So, I guess, my conclusion is, that it's safe for trademarks, but a terrible idea for code. But what about domains names? In theory, I should also be able to own and lease them, and the legal entity would be entirely responsible for how it uses them. They can't cause bugs, can they? > Frankly if you are not even in business yet and aren't making money you are worrying about the wrong problem, get customers, get business, make something, then optimize corporate structure once things are really moving and you have income coming through the door. The companies in question are already profitable, and I just want to make sure that nothing unexpected can happen to them.
    • davismwfl 6y ago
      Yea, you can do that with domain names etc cause as you said they are low risk items, but not sure you really gain anything by doing that but it is doable for sure. I did this specifically with a patent I have that I licensed to my company, the company implemented it and so the implementation was on the company not me personally. I did that so I could relicense, resell or use the patent other places if the company failed without having to reacquire it etc. It is perfect for things like that overall. Trademarks and domain names all kinda are the same but if you have ideas of valuing the company you will have to have in place an explanation for how the company is protected from you holding it hostage. For example, with my patent one, the company had the right to purchase the patent at a cost not to exceed a certain dollar amount. This gave any acquirer (or potential investor) comfort that I wouldn't hold the company hostage with unreasonable demands at the last minute.
    • 6y ago
• brudgers 6y ago
  If it matters, hire a lawyer experienced in this sort of thing. I'm not a lawyer, if I were cowboying the legal structure myself, I would form a pass through entity for the assets. Maybe an LP with an LLC as the general partner and with the LLC under my control.The LP would license the IP to the SAAS company. The LLC would control the LP and I would control the LLC. Again, if it matters, talk to a lawyer. If it's not worth spending money on a lawyer, then it does not matter all that much.