How to Transfer Intangible Assets to a Corporation

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Use a written contract to transfer ownership of an intangible asset.
Use a written contract to transfer ownership of an intangible asset. (Image: Jupiterimages/Comstock/Getty Images)

The way you complete a transfer of intangible assets to any other party, including a corporation, depends on the type of asset involved and the nature of the underlying transaction. Intangible assets are rights that a business owns and benefits from but that do not have physical form, such as copyrights and trademarks, and cannot be easily valued, such as reputation or a proprietary client list. Most often, you can complete the transfer of an intangible asset by assigning the rights to it using a contract. If the transfer is part of a larger sale, including the intangible as part of an asset purchase agreement would likely be sufficient.

Value the assets. Before you can transfer an intangible asset, you must determine its value so you can pay taxes on the transaction, if necessary. Intangible assets are unique, and establishing value is subjective by necessity. Use a valuation model that is appropriate for the asset involved. For instance, the value of a trademark can be established by the difference between the selling price of goods marked with it and those those sold generically. You can also retain a professional valuation expert to render an opinion.

Execute an asset purchase agreement if the transfer is part of a larger transaction. If the transfer of intangible assets is part of a sale of an entire business to the corporation, for instance, all assets would be included as part of the sales agreement. The asset sales agreement is a contract that completes a sale as a composite of the value of selected assets being sold, rather than a purchase of the ownership interest in an entire entity.

Execute an assignment of rights. If the transfer of intangible assets to the corporation is not part of a larger sale, if you are gifting your rights or or if you are having them transfered involuntarily, draft a contract that transfers the right to receive the benefits of the assets from you to the corporation. Occasionally, you may want to execute both an asset purchase agreement and an assignment of rights in intangible assets if you expect to need a document that addresses the intangibles specifically.

Notify licensees or other involved parties. Some intangible assets have benefits attached that accrue from licensees or other arrangements, such as in the case of royalty payments on copyrights. In these instances, you have to contact the parties and inform them of the transfer. Often, the party will require you to fill out their own assignment forms and attach the assignment agreement to effect the transfer of payments.

Change the ownership record on official registrations. Certain intangible property is registered with government agencies and other organizations. For example, copyrights can be registered with the U.S. Copyright Office and trademarks with the U.S. Patent and Trademark Office. These agencies maintain an ownership record for the asset. Contact the agency at issue and follow the procedure to add the new owner to the record.

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