Free Founder IP
Assignment Template
Sign it on day one of company existence. Pre-formation code, designs, brand and business plans all transfer cleanly — and your future investor diligence does not collapse.
Written by
Martin Kotze
Attorney, Conveyancer & Notary Public
Founder IP — code, designs, brand, business plans created before the company existed — does not automatically pass to the company on incorporation. Under section 21 of the Copyright Act 98 of 1978, copyright vests in the natural person who created the work; under section 22(3), transferring it to the company requires a written assignment signed by the founder. Without this, the company has at best an implied licence — which investors and acquirers will flag in due diligence and which is fragile in a co-founder dispute. This template is the day-one document every SA startup founder should sign. Industry-specific carve-outs, licence-back arrangements, and tax-efficient s 42 share-for-asset structures need bespoke drafting.
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What’s in the template
What it’s not
A template is a starting point, not legal advice. This IP assignment doesn’t cover:
- Complex IP carve-outs (legacy code retained, third-party-licensed IP, joint creators).
- Licence-back arrangements where the founder retains use rights — these need bespoke drafting.
- Tax-efficient share-for-IP structures or s 42 asset-for-share transactions — get tax advice.
- Investor-facing IP representations and warranties for a funding round — bespoke required.
Frequently asked
Why do founders need a written IP assignment to their own company?
Under section 21 of the Copyright Act 98 of 1978, copyright in any work created before the company existed remains with the natural person who created it — the founder. It does not automatically pass to the company on incorporation. Without a written, signed assignment under section 22(3), the company has at best an implied licence, which is fragile, undefined, and routinely flagged by investors and acquirers during due diligence.
When in the company lifecycle should this assignment be signed?
As soon as the company is incorporated, before any external party (co-founder, investor, employee, contractor) gets involved. Retro-fitting an IP assignment years later is harder, more expensive, may trigger tax consequences, and creates evidentiary problems — courts and investors prefer contemporaneous documentation. Signing on day one of company existence costs nothing and prevents the most common founder-IP horror stories.
Does this template also cover code, designs, and brand assets?
Yes. The assignment covers all IP created by the founder relating to the company's business, including source code, designs, prototypes, brand names, logos, written content, business plans, and customer lists. The schedule lets you list specific assets being assigned, which is best practice for evidentiary clarity in a future due diligence.
What if I want to keep using my own pre-existing code or content?
That requires a licence-back arrangement — the founder assigns the IP but retains a (usually non-exclusive, royalty-free, perpetual) licence to use it for their own purposes. This is common where the founder is a long-time developer with reusable libraries or templates they want to use in future projects. The standard template does not include this — bespoke drafting is needed to get the licence scope right and avoid POPIA/confidentiality bleed-through.
Are there tax consequences to assigning IP to a company?
Potentially yes. Transferring valuable IP to a company can trigger capital gains tax in the founder's personal hands, depending on the IP's value and the consideration received. Section 42 of the Income Tax Act 58 of 1962 provides asset-for-share rollover relief in certain structured transactions. For meaningful IP value, get tax advice before signing. For early-stage IP with limited demonstrable value (typical pre-revenue startup), the practical tax exposure is usually small.
Will investors accept this template, or will they require their own?
Investors will almost always require their own form of IP assignment alongside their subscription documents — that is normal. But having a properly signed founder IP assignment from incorporation is the precondition. Without it, investor diligence will find the gap, and the funding round either stalls or requires retro-assignments at the worst possible moment. This template is the foundation, not the final word.
Founders, co-founders + investors involved?
For multi-founder companies, complex IP histories, licence-back arrangements, or pre-funding clean-ups, get bespoke drafting. For an existing draft you’d like reviewed before the next investor email, we can turn it around in 24 hours.
Why you can trust this: Martin Kotze has been an admitted Attorney of the High Court of South Africa, registered Conveyancer, and Notary Public since 2014, practising from Pretoria. The firm is regulated by the Legal Practice Council under firm registration F17333.
This guide is general information, not legal advice for your specific matter.