The legal myth that we are busting today relates to ownership of your trademark if something happens to your company. This is actually a pretty sad case because it happened to a client of mine. She came to me and she said,”Look I need you to transfer my trademark out of my company into my personal name.” I said to her, “Sure. Easy done, we will just give you the documents, you sign them, we submit them. But I always ask for a little bit more background information, why are you wanting to do the transfers? It’s perfectly legal for anybody to own the trademark. You can sell it from your company to your personal name or if you got it in your personal name to your company.” And then, she told me that her company had been deregistered.
Past tense “had been deregistered.” I said to her, “Well, you can’t actually deal with the company assets anymore because the company assets, once your company has been deregistered, all of the assets are forfeited to the state. So it means that the government now owns everything that your company owned.” Then she said, “Well, my company didn’t own anything, other than the trademark of course.” So her trademark was owned by the government and because her company had been deregistered on the company’s register, it showed it was deregistered.
She had the option of applying to the relevant government department to buy it back, she could try and get her company reinstated and then sell the trademark to herself. It’s a good reminder to us that if you’re trading with a company, the company’s assets, or stuff that it owns, it doesn’t belong to you personally, it belongs to the company. When the company dies, like with the deregistration, you don’t have to have those assets anymore.
So it’s really important if you’re winding down a company for whatever reason, especially if you’re going through insolvency, to get proper advice from people who specialize in insolvency cause it can be a bit of a minefield. If you take the assets out of the company just before you deregister it, that can be seen as improper dealing and you might be personally liable for some of the debts.
But, if you just wanted to transfer the trademark out of the company, in my current example, she would have had to have done it before the company was deregistered. My name is Cathryn Warburton, and I am the Legal Lioness. I have loved busting legal myths to protect your business and give you the lifestyle that you deserve. If you want to see more legal myths being busted, hop on to the legallioness.com.