What happens to your IP and trademark if you fold a Ltd Co?
Discussion
A Limited Company has the name of its product and the logo of its product trademarked. Also, there are various bits of tech IP relating to the product.
If this company is folded, what happens to the trademarks and IP? I've been told they become the property of the crown. Is that true?
If so, is there any way to transfer these things to the individuals named as directors of the Limited Company so the product can continue to be developed, albeit no longer under the guise of a Limited Company which, on reflection, wasn't necessary at this stage?
If this company is folded, what happens to the trademarks and IP? I've been told they become the property of the crown. Is that true?
If so, is there any way to transfer these things to the individuals named as directors of the Limited Company so the product can continue to be developed, albeit no longer under the guise of a Limited Company which, on reflection, wasn't necessary at this stage?
Solvent or insolvent wind down?
Solvent - distributed in specie to shareholders or if not reverts to Crown estate (only intended as a last catch all)
Insolvent - kept within the company and realised on behalf of the creditors. If you want to buy it out of the Company before winding it up you need to check buying at fair value, with an independent valuation.
Solvent - distributed in specie to shareholders or if not reverts to Crown estate (only intended as a last catch all)
Insolvent - kept within the company and realised on behalf of the creditors. If you want to buy it out of the Company before winding it up you need to check buying at fair value, with an independent valuation.
When the owner has ceased to exist and has no successor, the IP is Bona Vacantia (ownerless) and transferred to the Bona Vacantia Division (BVD) of the Crown. Here's the GOV guidance on buying IP back from the Crown: https://www.gov.uk/guidance/buy-intellectual-prope....
As sleepezy mentioned, this only happens in limited circumstances. This can make it unclear who the current owner is without an understanding of company law. You can buy IP from the Crown, but they might not even own it and won't provide any warranties that they do own it. Therefore, it's important to get legal advice on who actually owns the IP before assigning it to yourself.
Where renewal fees are due for registered IP (10 years for TMs, 5 years for designs, annual for patents), the Crown won't pay them. Grace periods for late renewals only run for a limited time. Therefore, it's important to bear in mind that some registered IP may irrevocably lapse if left for too long.
The Crown also won't update the registered owner at the UKIPO upon acquiring the IP or upon selling the IP. Therefore, throughout this process, the dissolved company may remain as the registered owner but the true owner would actually be the Crown. In addition, after buying IP from the Crown, you should also file the relevant UKIPO form to update the registered owner to yourself.
As sleepezy mentioned, this only happens in limited circumstances. This can make it unclear who the current owner is without an understanding of company law. You can buy IP from the Crown, but they might not even own it and won't provide any warranties that they do own it. Therefore, it's important to get legal advice on who actually owns the IP before assigning it to yourself.
Where renewal fees are due for registered IP (10 years for TMs, 5 years for designs, annual for patents), the Crown won't pay them. Grace periods for late renewals only run for a limited time. Therefore, it's important to bear in mind that some registered IP may irrevocably lapse if left for too long.
The Crown also won't update the registered owner at the UKIPO upon acquiring the IP or upon selling the IP. Therefore, throughout this process, the dissolved company may remain as the registered owner but the true owner would actually be the Crown. In addition, after buying IP from the Crown, you should also file the relevant UKIPO form to update the registered owner to yourself.
sleepezy said:
Solvent or insolvent wind down?
Basically it's a dormant company, set up purely because a business advisor told us that having a limited company structure in place would make it a lot easier to attract SEIS investment. In the end it made no difference and is simply an administrative burden. We were never trading. We built a tech product which would need investment to cover the operating costs until it had generated a data set large enough for this to be monetised, thus providing an income and a return on that investment.
When we first started we had a collaboration agreement drawn up by a lawyer to govern the rights and obligations of those involved. The limited company came later. We want to revert back to the pre-limited company scenario, therefore, it's important that we, as a group of individuals, retain ownership of the components that we've worked to create which are currently owned by the limited company.
MitchT said:
Basically it's a dormant company, set up purely because a business advisor told us that having a limited company structure in place would make it a lot easier to attract SEIS investment. In the end it made no difference and is simply an administrative burden.
We were never trading. We built a tech product which would need investment to cover the operating costs until it had generated a data set large enough for this to be monetised, thus providing an income and a return on that investment.
When we first started we had a collaboration agreement drawn up by a lawyer to govern the rights and obligations of those involved. The limited company came later. We want to revert back to the pre-limited company scenario, therefore, it's important that we, as a group of individuals, retain ownership of the components that we've worked to create which are currently owned by the limited company.
This setup is common, but you may be interested to know that the company might not own the IP rights in the product (copyright and other unregistered rights) unless certain circumstances applied. We were never trading. We built a tech product which would need investment to cover the operating costs until it had generated a data set large enough for this to be monetised, thus providing an income and a return on that investment.
When we first started we had a collaboration agreement drawn up by a lawyer to govern the rights and obligations of those involved. The limited company came later. We want to revert back to the pre-limited company scenario, therefore, it's important that we, as a group of individuals, retain ownership of the components that we've worked to create which are currently owned by the limited company.
First ownership always starts with the creators and only automatically moves away from the creators if a contract or other rule of law provides for this.
Wording to look for in collaboration agreements: assignment of existing IP; ownership of future IP; assignment of future IP. Each has a different meaning, and the wording can be quite sensitive. If there are no IP ownership provisions, then the IP stays with the default first owners.
There are also questions relevant to employment: was anyone under an employment contract with the company, and if so what were their duties?
May be worth investigating before assuming the Crown owns the IP rights in the product, as this would affect the price you pay.
If the Crown does not own the IP rights in the product, then it's likely the IP rights are distributed across several people/companies and could benefit from consolidation to one entity.
Edited by Grrbang on Monday 10th April 22:29
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