IP assignment
Definition
IP assignment is the legal transfer of ownership in everything a business is made of, including code, designs, copy, trade marks, domains and data, from the seller to the buyer. At $50k–$150k the wording itself is routine, and the work sits in proving the seller owned every part of the business in the first place.
IP assignment is the legal transfer of ownership in everything a business is made of, including code, designs, copy, trade marks, domains and data, from the seller to the buyer. It is the clause that makes the rest of the purchase agreement mean something.
At a $50,000 to $150,000 deal, the assignment wording is usually straightforward and the chain of title is where the work sits. A buyer at this level will ask who wrote each part of the product, under what arrangement, and whether there is anything in writing. Most solo founders assume that paying someone transferred the rights. In much of the world it did not, and copyright stays with the person who wrote the code unless a signed assignment says otherwise.
Where it bites
Contractors, mainly. The freelancer who built your billing integration in 2023, the designer who drew the logo, the writer who produced 60 articles that now rank. Each of them may still hold rights in what they made, and a buyer's solicitor will find it.
Licences are the other half. Copyleft dependencies inside a closed-source product, stock assets licensed to you personally rather than to the company, and fonts licensed for one domain all show up at the same stage.
Worked example
A $95,000 exit of a tool earning $32,000 a year. Diligence turned up two contractors with no written assignment, one of whom had built the dashboard. Both signed retrospective assignments without argument, and it cost the seller a small fee and three weeks of delay.
That is the good outcome. The bad one is a contractor who has moved on, changed email address, or decides that a business changing hands for six figures is a reason to negotiate.
Sort the paperwork before you list. Assignments from everyone who has ever written code or made assets for the business, a licence inventory, and trade mark and domain records in the company name. It is a weekend of admin that removes the most common reason a six figure transfer stalls.
Related: asset-purchase-agreement, due-diligence, representations-and-warranties
See what a business at this level is listed at.
Everything on sale between $50,000 and $150,000, on the same fields.