If a founder owns the trade mark personally, do not assume the company acquires it by paying marketing bills or issuing shares. Decide whether the intended arrangement is a transfer of ownership or permission to use the mark. Then document the rights the business needs, including what happens if ownership of the company changes.
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Start with the actual owner and the protected rights
Obtain the registration or application details, named proprietor, relevant classes and any existing licence or security documents. Check that the branding used by the business matches the rights being discussed. A company name registration and a trade mark registration answer different questions.
A licence is different from an assignment
IPOS explains that a proprietor can license another party to use a mark, and distinguishes that from ownership-transfer procedures. IPOS also advises recording a licence so third parties can see the interest. Ask an IP adviser which documents and recordals suit the agreed transaction.
Example: a founder sells the operating company
A founder intends to sell all company shares but keep the brand personally. The buyer assumes the business can continue trading under that brand. Resolve this before signing: a share sale and a transfer of separately owned intellectual property are not interchangeable steps.
Questions the licence should answer
- Which mark, products, services and territories may the company use?
- Is use exclusive, and can group companies or distributors use it?
- Who approves brand changes and quality standards?
- Are fees payable, and who reviews their tax treatment?
- Who handles renewals, enforcement and infringement allegations?
- What happens on founder departure, death, a company sale or default?
If several founders hold rights, identify whose consent and signature are needed. Do not use a standard single-owner licence without checking the ownership arrangement.
Give the company a workable transition
An immediate termination right may affect websites, packaging, customer communications and stock already produced. Discuss a defined transition period, stock sell-through and removal of branding. These are negotiation points, not automatic entitlements.
Prepare a joined-up document file
Provide the adviser with the shareholders’ agreement, proposed sale terms, brand registrations, current uses and any earlier promises. Ask the accountant to review payments separately. Keep the signed agreement and evidence of any completed recordal together.
Does owning company shares mean owning its founder’s mark?
No. Establish the mark’s ownership separately from the company’s share ownership.
Should we backdate a licence to cover old use?
Do not create a false execution history. Explain previous use and obtain advice on documenting the real position.
Related guidance
trade mark registration; shareholders’ agreement provisions; company authority documents.
Discuss your next step
RCS can coordinate founder, licence and business-sale document review through advisers from associated law firms. Email [email protected] or WhatsApp +65 8501 7133. Legal advice, where needed, is provided by advisers from associated law firms.