If you have more than one business owner and the business splits, who then owns the trademarks? Well, it’s an interesting question and it really depends on the situation, it depends on the agreement that you have come to. If you have, from the very beginning, created an exit agreement, which is something I recommend, the exit agreement would explain and state exactly what’s gonna happen to not only the trademarks, but all property in the business.
That might include other intellectual property, it might include Goodwill, it might include customer lists, all that type of thing. The other thing is that if you are in a company or a partnership and you’ve got a partnership agreement or a shareholders agreement, that agreement might also set out what happens to the assets should the business owners split. But if the business is a company and the business owners each are shareholders, and the one shareholder leaves, sells their share in the business, the company still retains ownership of the intellectual property.
So, the other shareholder, because they own the company basically they get to control the trademark and the other property of the business. You can change those agreements so when it gets to a position where the company is no longer gonna be in the business, you can, at that stage, agree what’s gonna happen with the trademarks and other assets. Except of course, if the company is being wound up, if it’s going into insolvency, then the assets need to be sold to pay for the debts of the company. In that situation, you don’t get to control what happens with the assets, it’s the liquidator that controls what happens with the assets.
So, if you are in business in a collaboration with other business owners, what happens to the business assets and the intellectual property really depends on the situation. But if you thought about it beforehand and put it in an exit agreement, you’re more likely to get the result that you want. Because when people part companies on bad terms, it’s very difficult to get them to come to a sensible agreement. As stated previously if the company owns the assets and the is going bankrupt, the liquidator will decide what happens to all of the assets. You may get an opportunity to purchase the trademark back from the company, from the liquidator. If they are able to make that offer to you and depending on what price they want and whether an agreement can be made. My name is Cathryn Warburton and I am the Legal Lioness.