IP checks before buying a company

When buying shares, the company may remain the owner of its IP, but the buyer still needs to verify what it owns and can use. Identify the assets essential to products, revenue and brand recognition. Review the evidence rather than relying solely on a management list.

Investigate founder-held rights, contractor work, third party components and licence restrictions. A change of control clause may affect a permission even where the company itself remains unchanged. Link technical review to legal ownership so that code access and rights are both addressed.

Identify the rights that support the valuation

List the brands, software, designs, content, know-how and licences the company needs to trade. Distinguish registered rights from unregistered material and contractual permissions. The IPO overview explains that different forms of intellectual property protect different subject matter. ^[1] A single entry called intellectual property in an asset register does not show which rights exist, who owns them or whether they support the buyer's intended use.

Ask the commercial team which assets make the business distinctive and which are essential to delivery. A rarely used registered mark may be less important than the unregistered code controlling the main product. Prioritise evidence accordingly. Connect each asset to the revenue or process that depends on it so a missing assignment or narrow licence has a clear commercial significance in the diligence report.

Trace ownership through creators and transactions

Identify founders, employees, contractors and agencies involved in creation. Review signed agreements and relevant assignments rather than assuming the company owns everything it paid for. Work created before incorporation may need a separate chain of title. The IPO's copyright ownership guidance provides a starting point for creator and employment distinctions. ^[2] Investigate the actual circumstances and obtain advice where documents or status are uncertain.

Check historic company names, reorganisations and purchases that may explain a mismatch in registered ownership. A name change is different from a transfer to another legal entity. Keep evidence of the underlying transaction and any appropriate recordal. Do not treat a register update as a substitute for the document establishing the transfer itself.

Review licences and technical dependencies

Identify third-party software, images, fonts, datasets and other components within the product or marketing materials. Check permitted users, territories, redistribution, modification and transfer or change-of-control restrictions. A licence sufficient for the seller's current use may not cover the buyer's plan to combine products or enter another market. Record the gap before the acquisition model assumes unrestricted expansion.

Ask technical reviewers to connect their findings to the legal evidence. Repository access, source files and deployment credentials show practical control but not necessarily ownership. Conversely, a valid assignment is less useful operationally if the company cannot retrieve the build tools or original design files. Use Who owns software created by a contractor for contractor software issues and Assigning intellectual property to a company for assignment preparation.

Convert gaps into completion and handover actions

For each material gap, decide whether a corrective agreement, consent, replacement asset or commercial adjustment is needed. Assess whether the relevant creator or rights holder is available and willing to cooperate. Avoid assuming a missing assignment can be obtained immediately after completion at no cost. If the buyer accepts an unresolved risk, record the basis and operational contingency explicitly.

Review disputes, infringement allegations, renewal deadlines and security interests affecting the rights. Check who will receive official correspondence after the deal and how portfolio management transfers. Keep confidential know-how protected during diligence and handover; publishing it in a broad data room can damage the value the buyer intends to acquire even where formal ownership is clear.

For Business purchase due diligence support, provide an asset inventory, creator history and material licences, with technical findings linked to each item. Ask for conclusions focused on ownership, permitted use and continuity. The completion file should contain the agreed rights documents and practical handover evidence, while a separate action list tracks renewals and unresolved matters. This makes the IP review usable by the team operating the acquired business after the transaction specialists have left.

Test control of a critical digital asset

Choose an important domain, software repository or design account and trace both legal ownership and administrative control. Identify the named registrant or contracting party, the people with access and the recovery process. A founder's personal account may control a valuable asset even where the business has paid the subscription for years.

Agree the required transfer or access changes before completion and verify them through a controlled handover. Keep recovery information secure and check connected billing and renewal notices. Technical access is not proof of ownership, and ownership documents do not guarantee usable access. Addressing both sides helps the buyer avoid a preventable interruption when the seller's personal accounts are closed or the original developer becomes unavailable.

Illustrative scenario

A target company uses a core software component under a licence that restricts changes of control. The buyer discovers the restriction during review and adds the required approval to the transaction plan. The fact that the licence holder remains the same company does not eliminate the contractual issue.

Preparation checklist

• Identify IP essential to the target’s operations.
• Trace ownership through founders, employees and contractors.
• Review licences, disputes and change of control clauses.
• Agree resolutions for material gaps before completion.