IP Holding Company Operating AgreementThis Agreement may be used where a business is structured through a holding company that owns intellectual property, and an operating company that uses the intellectual property, as a licence enabling the use of that intellectual property.
Many businesses find that operating under a "Holding", "Dual" or "Parent" company structure works best for them. In particular it allows them to hold their assets in an entity that is separate from the entity that operates the business and carries its liabilities, and therefore protects those assets from creditors in case of insolvency. For intellectual property to be effectively protected under such a structure, the "Subsidiary", or "Operating" company, must be using that intellectual property lawfully, under a commercially sound licencing agreement. This agreement provides terms that can effectively allow such a structure to operate.
What does the Intellectual Property Company Operating Agreement cover?
- Licensing fee and security to ensure the payment of the fee;
- Appropriate accounting practices;
- Appropriate promotion and marketing practices; and
- Dispute resolution and general terms.