Who owns the code? What UK businesses should check before they pay a developer.
Paying for software does not automatically make it yours. Under UK law, copyright in commissioned work stays with the person or company that wrote it unless it is assigned to you in writing. Here is what that means, what investors check and the simple paperwork that protects you.
The short answer
If an employee writes code as part of their job, your company owns it. If a freelancer or another company writes it, they own the copyright unless they have assigned it to you in writing. Paying the invoice is not enough on its own, and without an assignment you may only have an implied licence to use what you paid for (GOV.UK, Ownership of copyright works).
Section 90(3) of the Copyright, Designs and Patents Act 1988 says an assignment of copyright has no effect unless it is in writing and signed by, or on behalf of, the person assigning it.
Why it matters
- Raising investment. Investors' lawyers ask for IP assignments from founders, employees and every contractor who worked on the product (Ashfords, founder due diligence checklist).
- Selling the business. A buyer's due diligence asks the same questions, and gaps can reduce the price or stall the sale.
- Changing supplier. Without an assignment, a former developer may still have rights over code you rely on.
- Disputes. If a working relationship ends badly, ownership is often the first thing argued about.
Code is only part of it
Ownership problems are usually practical before they are legal. A story UK businesses tell more often than you might think is the developer who disappeared holding the domain, the hosting and the logins (Herefordshire and Worcestershire Chamber of Commerce, April 2026). Check that your company holds:
- the domain name, registered with your company as the registrant;
- the hosting and cloud accounts, in your company's name with your payment details;
- the code repository, in your company's own GitHub, GitLab or Bitbucket organisation;
- the Apple and Google developer accounts for any app;
- analytics, email and other service accounts, with you as the owner.
Open-source and third-party code
Almost every product uses open-source components. They stay under their own licences, which is normal, but some licences, such as the GPL and AGPL, carry obligations that matter for commercial software. Ask your developer for a register of open-source components and their licences, and keep it with your IP paperwork.
Designs, written copy and documentation are copyright works too. Unlike code, they can carry moral rights, so a good contract deals with those as well.
What to put in the contract
- A present assignment to your company of the copyright and other IP in the deliverables, including future copyright, signed by the developer.
- A permanent, royalty-free licence to use any of the developer's pre-existing tools or libraries that are built into your product.
- A list of open-source components and their licences.
- An obligation to hand over code, credentials and documentation when the work ends.
- A waiver of moral rights in designs and copy.
This is the approach our own terms take. Whoever you hire, take your own legal advice on the contract.
If you already have a gap
It is usually fixable. Ask the developer to sign a confirmatory assignment of the work already done, take legal advice on the wording and move accounts into your name as soon as you can. If the developer cannot be reached, a solicitor can advise on the options. Our project rescue audits flag these gaps as part of the review.
Sources
- GOV.UK, Ownership of copyright works
- Copyright, Designs and Patents Act 1988, section 90
- Ashfords, Investment and exit readiness: a practical guide for founders preparing for due diligence, 2025
- Herefordshire and Worcestershire Chamber of Commerce, What to do when your web developer disappears, 15 April 2026
General information, not legal, tax or financial advice. Figures were checked on the publication date and can change, so confirm the current position with the source or a qualified adviser before you act.
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Frequently asked questions.
Do I own code I paid a freelancer to write?
Not automatically. Under UK law the freelancer owns the copyright unless they have assigned it to you in writing and signed the assignment. You may have an implied licence to use the code, but that is weaker than ownership. Check your contract, and ask for a written assignment if there is none.
Does code written by my employees belong to my company?
Generally yes, if they wrote it in the course of their employment. It is still worth having a clear IP clause in employment contracts, because investors' lawyers will check them, and work done outside normal duties can be less clear-cut.
What is an IP assignment?
An IP assignment is a written document, signed by the person who owns the intellectual property, that transfers ownership to someone else. For copyright in the UK, it must be in writing and signed to take effect, which is why a contract clause or a separate signed assignment matters.
Can I fix a missing IP assignment later?
Usually, yes. The developer can sign a confirmatory assignment of work already done. If they cannot be reached or will not sign, take legal advice on your options. Fixing it before you raise investment or sell the business is far easier than fixing it during due diligence.
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